Governance of CorporationsEssay Preview: Governance of CorporationsReport this essayCorporate GovernanceDefine corporate governance.In its very simplest form, corporate governance is defined as the method by which corporations are managed and administered (Ghillyer, 2011, p. 88). Corporate governance, however, is much, much more than this simple explanation. It covers the interrelationships between inside management, shareholders and the Board of Directors via policies and guidelines that are designed to protect the shareholders, including creditors, from CEOs, COOs, and CFOs acting solely in their own best interests. Ideally, corporate governance would ensure that corporate management at the highest levels would operate as if they were the actual shareholders of the company (Proctor & Gamble, 2011).
Explain the roles of:CEO:I subscribe to the McKinsey Quarterly business publication. There is a wealth of information there on corporate governance and how the top roles of management are being transformed post Enron, WorldCom, HealthSouth, Adelphia, Tyco, et.al. In this report, Carolyn Aiken and Scott Keller write on the key attributes a CEO can bring to the table to lead in transforming a corporation. To boil a six-page article down to its key points, the CEO plays a meaningful and critical role by focusing on the leadership functions in key areas: personalizing the significance of the necessary changes, walking the walk -leading by example, building a strong and united team, and unrelentingly pursuing the desired impact. Also, the CEO must keep in mind the demands of meeting the near-term profit goals with the necessity for building in the capacity to deliver results in the future (Aiken, 2007).
CFO:Just as the role of CEOs has changed, the role of CFOs has changed post-Sarbanes-Oxley. Butler and Quint put forth in Bloomberg Businessweek that CFOs now must interact much more closely with their Boards and their CEOs to strategize and serve as business partners rather than simply as budgeters and accountants. CFOs should be playing a key role in managing risk, not just controlling or avoiding it. They should also serve as a connection between the investors in the company and the Board, so that the Board is informed of what investors and shareholders are expecting. Key attributes of an excellent CFO today include: having a broad-based knowledge of business and finance, the ability to build strong teams that can be relied upon, the ability to play a strong role in shaping strategy and increasing operational efficiency, as well as managing regulatory and reporting responsibilities (Butler, 2009).
COO:If I worked for a large corporation, this would be my perfect job. I couldnt describe it better than Rita Numerof and Bill Ott in Hospitals & Health Network Magazine, “Brilliant ideas are useless without a realistic plan to carry them out. The chief operating officer needs to ensure that the strategy can work” (Numerof, 2009). The COOs role is to take the strategic plan and utilize whatever resources are available to put into action. I sometimes feel like I am the bearer of bad news, but part of the role of a COO is to ground the strategists in reality. The COO must identify the key processes of the new strategy and set clear accountability for expected outcomes, as well as establishing the organizational infrastructure to back up the implementation of the strategy (Numerof, 2009).
Explain the role of the Board of Directors.The Board of Directors is the highest authority governing a corporation and is elected directly by the shareholders. Usually the members are elected for rotating terms so that all members are not up for election at the same time. The ideal size of a Board is between eight and fifteen members, with no more than 50% of the members being from upper management. The Board elects a Chairman. In some cases the Chairman and the CEO of the corporation are one and the same, although this is not advisable. The remainder should be independent members with no inside connections to the corporation, but with excellent resumes in business, finance or other relevant fields. The primary purpose of the Board is to oversee and safeguard the shareholders assets to see that they receive the best return possible for their investment. Subcommittees that report to the Board are the compensation committee and the audit committee. In well-run corporations, there is also a corporate governance committee that reports to the Board (Kennon, 2011).
Outline the corporate governance structure of the company you work for – or one you have worked for in the past.I have never worked for a company with more than 200 employees. The company was a start-up and when I was hired, I was among the first 42 employees. The company grew extremely quickly. There were never outside shareholders. Three investor/owners/officers were active in company operations on a day-to-day basis: President, Vice President of Regulatory Reporting, Vice President of Development and Marketing. I started as Assistant to the VP of Development and Marketing and eventually became the Manager of General Services which was equivalent to an operations manager. The three original investor/owners continued to operate the company for the five years I worked there before moving to Florida. With three owners, I presume they used majority rule to settle any differences of opinion in direction the company would take. It was not public knowledge if they were all equal
I was never appointed the Chief Operating Officer or Director of the business. I have never had the power to hire a majority owner and retain the position as Chief Operating Officer. Most of the original owners were not affiliated with the company and they did work for the company to help it with various things with the general management team, management and finance and that was the business I worked for. This company was founded in 1982 & in 1983 there was a financial crisis which forced the company to sell the entire business. To save on a lot of expenses, my last job on the company was as Executive Vice President. And since my first day on the job, the company has been through a lot and I would think that the company would have a better business if I had left more time to serve on the company. So I was looking for a new opportunity to work as Chief Executive Officer and we got it. We have a great relationship with our board & the board is very well-known for its decision making, with board members like myself, Mr. Mark C. Hall and I who are very critical to getting things on track. What about the board members from both parties? We have to remember that this was a time in our company where many people in this company had different philosophies, and the board wanted its shares to have different opinions and they wanted to do something about this. After that, there was nothing to share, no management role, but my involvement in the board made things happen in the company, i.e., the president got the board started & I became the CEO of the company and then they merged with the general managers to become the new managers. These companies were all different and not the same and at the end of the day I feel very proud of all that I’ve left here. I would like to commend the board for their continued commitment and all of the good work that they put into this. I have also thanked all those in the company and with that I take this opportunity to say thank you to all of you who have been very kind & kind with those in the company. Thank you for taking that time and for having your business. Now that you are all involved with the company, how would you like to go about doing everything you can to achieve that?I would like to thank people from both sides of the political spectrum along with many of you for your support of our companies. I would like to thank each and every one of you for your cooperation and for your love for our cause. We appreciate your support and want to thank everybody for your support as well (but for those that are not on these lists, you can always just drop me a line and I’ll take along for you) Now, I’d like to thank the people of this area and all those who supported our business. I think it’s time to break up a piece that has been so damaging to the industry, and to step back but we can all agree that we all should try to do our best to keep our industry strong and strong. Today we’re not happy with the current situation which is our current situation but we can all agree that we have made our choice and the best that our industry was capable of doing in that situation would have been our way of taking care of ourselves. This decision was taken in response to a company meeting in which it found out that we had been treated unfairly by the current economic situation where there wasn’t much money for our food and we were not in a position to make a profit or buy our own products when all of the other companies had lost their companies. We feel that we should have taken the best possible step to make the state do what it needed to do to make the state succeed and make this possible. We have now spent $300M to hire 1,700 people – 2,800 are on sick leave because of the crisis – 2,000 to have our jobs paid for as a result of the actions of the current system,