...Balasubramanian in his book "Corporate Governance and Stewardship: An Overview", raised and discussed few pertinent questions about Good governance and whether it matters to the corporations. He says it is required to be studied that whether good governance creates sustainable value to companies and shareholders, does it mitigate their vulnerability to business risk and whether investors and stakeholders do care to see that their corporate connections are well governed or not? To answer these questions he referred some of the prior studies and suggested that the academic evidence and opinion on the relationship of good governance and good performance are mixed. He identified three categories of research i.e., opinion based research, focus...
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...strategy that was commonly used by similar companies as well as elaborating other principal causes of failure such as government interference and uncritical media coverage, A five year financial review of the company is provided beginning 1996 to the year 2000 showing how the operating revenue increased while the EBIT and profits decreased and finally led to losses. Mileski, J., & Nwabueze, U. (2008). The Challenge of effective governance: a case study of Swissair. Journal of Corporate Governance, 8, 5, 583-594 This article begins by giving a brief history of Swissair Company making note of its initial successes and good management practices. It then explores the best managerial practices that are crucial for the success of any business, laying emphasis on the precepts of effective corporate governance and their impact on businesses. The paper then explores the corporate governance practices that were common in the Swissair Company comparing them to the best corporate governance practices before clearly exposing the failures in corporate governance that led to the grounding of the company. This paper is important because it gives explicit corporate...
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...INTRODUCTION ........1 2.0 WHAT IS CORPORATE GOVERNANCE 2 3.0 CORPORATE GOVERNANCE THEORIES…………………….……………..........3 3.1 Fundamental corporate governance theories……………………..……………….3 3.1.1. Agency Theory………………………………………………………………3 3.1.2. Stewardship Theory…………………………………………………………4 3.1.3. Stakeholder Theory………………………………………………………….4 3.1.4. Transaction Cost Theory…………………………………………………….4 3.1.5. Political Theory……………………………………………………….……..5 4.0 NEED FOR CORPORATE GOVERNANCE………….……………………………..5 5.0 PILLARS OF GOOD CORPORATE GOVERNANCE…….......……………………7 5.1 Leadership…………………………………………………………………...…….7 5.2 Appointments to the board…………………………………….…………………..7 5.3 Strategy & values………………………………………………………………….7 5.4 Structure & Organisation………….....……………………………………………8 5.5 Corporate performance……………………………………………………..……..8 5.6 Corporate compliance……………………………………………………………..8 5.7 Corporate communication………...……………………………………………….8 6.0 OVERVIEW OF DEVELOMENTS IN CORPORATE GOVERNANCE………..….8 6.1 Global Initiatives……………………..……………………………………………8 6.2 Corporate Governance in Kenya……………………………………..……………9 7.0 IRRESISTABLE CASE FOR CORPORATE GOVERNANCE………………........11 8.0 CONCLUSION………………………………………………………………………11 REFERENCES………………………………………………………………………..…12 1.0 INTRODUCTION In today’s environment corporate Governance is not a luxury but a dire necessity for...
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...The Importance Of Corporate Ethics and Values: Building a Sustainable Strategy Model for Effective Implementation of Good Corporate Governance within a State-Owned Enterprise in South Africa. A Research Study Presented to the Graduate school of Business Leadership University of South Africa In Fulfillment of the Requirements for the MASTERS DEGREE IN BUSINESS LEADERSHIP UNIVERSITY OF SOUTH AFRICA Prepared by Lazarus Docter Mokoena (called Bonga) [Student No: 0555-418-7] Tel: 011-217 1187 (Work); 011-679 5486 (Home) Cell: 082 466 6896 SUPERVISOR: PROFESSOR M.H. CROSBIE FINAL RESEARCH REPORT November 2005 TABLE OF CONTENTS EXECUTIVE SUMMARY ............................................................................. 4 CHAPTER 1 ............................................................................................... 8 1. 1.1 1.2 1.3 1.4 1.5 1.6 INTRODUCTION................................................................................. 8 ESKOM’s COMPANY BACKGROUND ................................................ 8 ESKOM’s BUSINESS CONDUCT POLICY .......................................10 PURPOSE OF THE RESEARCH .......................................................12 PROBLEM STATEMENT .................................................................14 IMPORTANCE AND BENEFITS OF STUDY .....................................17 RESEARCH PROPOSITIONS AND HYPOTHESIS ...........................18 1.6.1 Propositions ...................................
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...Management and boards now feel compelled to ensure that proper governance processes are in place to protect corporate reputation, brand image and share holder value. According to Pricewaterhouse Cooper’s 8th Annual global CEO survey (Dec 2004), 50% of retail industry CEOs believe that there is a strong relationship among all elements of GRC (governance, risk and compliance) and that effective governance can be a value driver and a benefit versus a cost, to their companies. Effective corporate governance requires management and board involvement, accountability, embracing the processes, compliance, and structure required to direct and manage the affairs of a corporation. Its overall goal is to ensure the financial viability to the enterprise and enhance share holder value. For the retail and customer industry, globalization, which entails multinational operations, various financial reporting systems, and complex supply chain with wholesalers, distributors, and multiple types of retailers, not to mention multiple brand portfolios, and various types of outlets, provides significant rationales for management and boards to develop an effective GRC program. Successful corporate governance depends largely on trade-off among the various conflicting interest groups like government, society, inventors, creditors and employees of the organization. This study critically discusses the implementation practice of the corporate governance guidelines issued by Securities and Exchange Commission (SEC)...
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...Corporate Social Responsibility and Governance (FINM024) Assessment 1 – Case Study Aim: The case study aims at testing students’ understanding of the role of corporate governance in today’s business, how to establish good corporate governance practices, how to maintain an effective internal control system and assess control risk, and how to protect the organisation against fraud. Instructions: Students are required to read the case carefully before attempting the questions. All sources used must be cited using the ‘Harvard Referencing Guide’ in order to avoid plagiarism. Students MUST structure their answers as required. Please try to avoid language and grammatical mistakes, writing incorrect answers, and writing more than what is needed. Please read the questions carefully before answering them. Academic Honesty: Plagiarism will not be tolerated and could lead to your failure, so please make sure to use your own words in answering the case and to cite all the sources used. Please refer to Harvard Referencing guide to understand how to properly cite the sources used. Deadline and Submission: The deadline for submission is 10th April, 2015. All submissions have to be via Turnitin on NILE. Any submissions via email will be automatically discarded without prior notice. Students are only allowed to submit their assignment once, so no draft submissions will be accepted. Late submissions will not be accepted. If there are circumstances beyond the student’s control that deprive...
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...Corporate Governance Issues and Responsibility On the basis of the principles and rules outlined by the New Zealand Security Commission and code of ethics adopted by NZFSU and PGGW Wrightson in their company’s prospectus, they have failed to follow good corporate governance in their companies. In this case study, there were many corporate governance issues and some of them are highlighted below Board Composition and review: There was imbalance of independent and non independent directors in the board. Craig Norgate, who was the Chairman of PGG Wrightson failed to promote cooperation and efficiency amongst the board members, and was unsuccessful in trying to maintaining good relationship between the management and the board. The Chairman of NZFSU and PGWW failed to comply with the rules of Corporate Governance that, there should be a mix of balance and skills according to the size and complexity of firms, and in this case study, there were fewer independent directors and the need of them were felt by NZFSU, when the company’s current directors were unable to cope up with the failure of the company The board need to achieve the right mix, and should choose directors who have the required skills and knowledge and can contribute to achieve the goal of the company and provide more benefits to the shareholders. There should be a rigorous process for nomination and selection procedure of a director. The Chairman of Boards of PGG Wrightson and NZFSU, were accused in not disclosing...
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...being occupied by majority of outside members have no influence on the firm’s performance. This is because this study shows that the relationship between the audit committee and the two performance measures is not statistically significant.This result is not consistent with some previous studies such as Klein (2002) and Mansi and Reeb (2004), where they reported strong positive relationship between audit committee and the performance variables they used in their studies ← Audit committees being occupied by majority of outside members have no influence on the ← firm’s performance. This is because this study shows that the relationship between the audit committee ← and the two performance measures is not statistically significant.This result is not consistent with ← some previous studies such as Klein (2002) and Mansi and Reeb (2004), where they reported strong ← positive relationship between audit committee and the performance variables they used in their studies Corporate Governance and Firm Performance: The Case of Nigerian Listed Firms Kajola, Sunday O Department of Accounting, Olabisi Onabanjo University Ago-Iwoye, Nigeria Tel : 234-8033519371 E-mail: omobaaseye@yahoo.com ← Regarding future line of research, efforts should be put at increasing the sample size and the ← corporate governance variables, particularly the inclusion of ownership concentration/characteristics. ← The need to examine...
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...Abstract The present paper aims at reviewing the various developments in Corporate Governance in India. Corporate Governance has gained a lot of importance and momentum the world over. The objective of any corporate governance system is to simultaneously improve corporate performance and accountability as a means of attracting financial and human resources on the best possible terms and of preventing corporate failure. In short Corporate Governance is about promoting corporate fairness, transparency and accountability. Keywords: Corporate Governance (CG) Security and Exchange Board of India (SEBI) Stakeholders Clause 49 OECD principles Chapter: 1 INTRODUCTION 1.1 Prelude Corporate governance (CG) has emerged as a very important ideal. The reason is, today companies are substantially contributing to the overall growth and development, particularly in emerging economies such as India and a healthy investment environment is vital. The corporate form of business has succeeded gradually and expanded worldwide. However, not all companies are managed successfully. There has been a spree of corporate frauds worldwide, e.g., Enron in the United States and Satyam Computers in India. The latter had accounting and auditing flaws apart from lack of accountability and oversight by Independent Directors at Board meetings. There was no whistle-blowing in case of Satyam Computers unlike Enron. The Satyam Computers revelation was an outcome of a takeover...
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...Code of Corporate Governance – A Critical Comparison between Bangladesh and Malaysia James Bakul Sarkar Assistant Professor in Accounting and MBA Coordinator Faculty of Business ASA University Bangladesh E-mail: jamssarkar@yahoo.com Mob: 0171-6599599 Dewan Muhammad Nur A Yazdani Lecturer in Marketing Faculty of Business ASA University Bangladesh E-mail: dewanm@hotmail.com Mob: 0172-7681817 Md. Abdul Mannan Assistant Professor Department of Business Administration Stamford University Bangladesh Mob:0171-6418892 Code of corporate governance – A critical comparison between Bangladesh and Malaysia Abstract: Corporate governance is the way in which the corporate entities are governed. The question is: Who will determine the way- the entity itself or the regulator. Different stakeholders with quite diversified interests have stakes (interests) in the operation of business. Consequently, the business entity should not be allowed to operate in every respect in the way it likes; the regulators should come forward to impose certain restrictions and principles on the corporate affairs to upkeep the best interests of stakeholders like investors, creditors and after all the capital market. Such restrictions and principles can be termed as Code...
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...Title CORPORATE GOVERNANCE AND THE ROLE AND INTERNAL AUDIT WITHIN HIGHER EDUCATION IN UNITED ARAB EMIRATES (UAE) Why I am interested in this area I am working as Senior Internal Auditor in the Education Industry from last 4 years and for this reason, I consider it as a great opportunity to explore and research, that, any importance is available and provided in this aspect or not and what are the preventive and mitigating measures taken by the Institutions to overcome towards any shortfalls or problems. The term “Corporate Governance” is relatively new in this area and specially in the field of Education and it will not only be a great learning curve for me but will also help me understand the Industry practices, and for sure it will help towards my future development and getting more experience in this field. Introduction to the focus of study Similar to the counterpart of the industries, Educational institutes are facing increasing demand for accountability. Students for example requires a strong institutional commitment towards their future growth and quality teaching, agencies and donors requires assurance that institutions are contributing towards public good moreover they are also concern about the correct utilization of their funds/ donations i.e. are they being utilized according to their desires and requirements. For government and related agencies, they are concern with the implementation of regulations and other procedures. Alumni want an assurance...
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...IMPACT OF CORPORATE GOVERNANCE ON FIRMS PERFORMANCE: CASE OF FAMILY FIRMS IN MALAYSIA CHAPTER 1: INTRODUCTION 1.0 Background of Study For many years and in many economies, most of business activity was accompanied by proprietorships, partnerships, or closed corporations. In these forms of organizations, a small and closely related group of individuals belongings the same family or co-operating in business for lightly periods runs the firm and share the profit. A lot of attention, has focused on the relationship between ownership structure and corporate performance for instance, a research agenda on the implications of ownership structure on corporate governance by La Porta et al (2000) sustain the legal structure does not offer sufficient protection for outside investor or entrepreneurs, original owners are forced to maintain large position in their companies which results in a concentrated form of ownership thus having implications on ownership structure. On the other hand, more of evidence according to Shirley and Walsh (2001) indicates the private held firms are more efficient and more profitable than publicly held ones although the evidence differs on the relative merit of the identity of each private owner. In 1976, Jensen and Meckling provided results of their researches on ownership structure and firm performance by dividing shareholders into internal investor with management right and external shareholder who are investor without the ballot right. The...
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...EXECUTIVE SUMMARY This paper investigates about the Enron Corporation and Arthur Anderson. This assignment is to identify the background of Enron and Arthur Anderson and Enron fail. Other than that, identify the business risks that faced by Enron. Moreover, determine the responsibilities of board of directors and steps to improve corporate governance. Besides that, differentiated between rules-based accounting and principle-based accounting and the uses. In addition, there are discussion about auditor should allowed to provide non-audit services. There are also critical discussion on the reason audit partners struggle with making tough accounting decisions and a good recommendation of changes to be made. 1.0 Background of Enron Corporation and Arthur Anderson and fall Of Enron. 1.1 Background of Enron Corporation Enron was established in the middle of a recession in 1985, when Kenneth Lay CEO of Houston Natural Gas Company (HNG), persuaded a joining among Inter North Incorporate (Peterson). There was a young consultant named Jeffrey Skilling who had a background in banking organization (Peterson). He planned an innovative solution for Enron profit in the natural gas business (Sridharan, Dickes, & Caines). For instance, Enron buy natural gas from suppliers and sell to customers with the higher price (Sridharan, Dickes, & Caines). It is because the demand of natural gas increased (Peterson). Kenneth Lay was very impressed with Skilling’s new solution in 1990 and...
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...A Study On “Social capital and relation with Good Governance (GG)”. Tanzina Ferdous Department of Public Administration University of Dhaka. Preamble One of the most striking developments in social science over the last decade is the rise of interest in social capital as a mechanism for understanding socioeconomic phenomena. “Social Capital”, it’s a sociological concept, which refers to connection within and between social networks. Ours is an age of modern democracy. And this democracy is much more related to the term Social Capital. Social Capital stands for network building with one another in the society and mutual trust and belief among the people in the society. And democracy runs smoothly in that society where the Norms, Values and Networks that mean the bondage among the general people is much more strong. The term good governance is an adjective of “governance”; governance can be defined as power which exercises for effective conduct of country’s economy and social resources. The governance is good when it is able to attain this theoretical objective. Good governance can play a vital role for a healthy and independent economy and culture. And Good Governance can be ensured only when the Social Capital is strong in any society. So it can be obviously said that there is a potential relationship among Social Capital and Good Governance in the modern world perspective. Concept of Social Capital Social Capital is a Buzzword in the recent phenomenon. A growing body of research...
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...To describe corporate governance as a subject of topical interest would be masterly understatement. What had already become a hot topic in Australia during 2001 has since burst out across the world, involving the direct intervention of the President of the United States. I’d say that Monash University has got its timing pretty right. The interesting question is whether this initiative would have received any interest or support in Australia two years ago. There is little doubt that by the end of the 1990s the business community was becoming wearied by the concept of corporate governance, seeing it as somewhat irrelevant, even passé: a response to the no longer relevant excesses of the 1980s. Many years of sustained economic growth, and Australia’s remarkable survival of the financial crisis in Asia, had led to a period of complacency about corporate governance - over time it became institutionalised and compliance focused, more driven by process and legal liability management for corporate officers than by notions of shareholder protection and wealth creation. In retrospect this self-confidence looks particularly short-sighted. At the very time when most of Asia, supported by the World Bank and the IMF, was focussed on the importance of corporate governance and institution building, the more developed economies (including Australia) assumed that their existing standards were adequate. We were, I think, partly lulled by the knowledge that some of the key economic ...
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