Corporate Governance of Company - Coursework Example

Name: Course: Tutor: Date: British Реtrоlеum (РLС) and John Brown: А Culture of Risk beyond Реtrоlеum Corporate governance as the name suggests refers to the particular patterns in which the companies are governed or managed. It is most instances portrayed as the laid down structures which determine how the company is directed and its performance. Corporate governance provides the various frame works for which the various interests of stake holder’s interests are balanced (Hunter 9). Corporate governance is facilitated by the activities of the board of directors, their activities is dictated by the legal, institutional, regulatory and ethics of the land. There are three principals that are involved in corporate governance in the modern world. This include the firm shareholders, they are the one who provide the necessary capital hence for any decision which may require heavy money transactions they must be consulted and they have the choice to approve or decline. The firm board of directors, they are elected by the shareholders to ensure proper management of the company resources. The senior executive personnel, they are responsible for the day to day activities of the company. Proper corporate governance requires competence leadership. This is provided when the company has a competent and qualified chief executive officer who will oversee proper running of the organization. There are various mechanisms of evaluating the competence of the CEO. Below are some of the questions which may aid in analysis the capabilities of the CEO: 1. Tell me about your failure? : This question is an all-round question and does not have to do with business alone. The question is aimed at determining whether the person is afraid of taking risk, it does show that the individual is afraid or not. Throughout his or her explanation they should tell how they were able to overcome their failure and if they failed they should be able to admit their failure. Most boards of governors advocate for individuals who have failed in certain tasks have they have an experience of the sour taste of failure. Individuals will always brag of their success and hide their failure and this should not be the case with a CEO of big multinational companies. 2. What is your biggest achievement? : This question is aimed at accessing if their passion agrees with yours. One is able to determine what motivates the individual since motivation is very important for the success of the chief executive officer. When the chief officer is motivated the same energy will be channeled to other junior staff hence increased output from the human resource. This question also provides a platform to identify the capabilities of an individual. We are able to know if the person is a big dreamer or not. Big corporation require guys who dream big and think outside the box and are not restricted by their own thinking, Individuals who aim at the sky. 3. What is the biggest risk you have ever taken? : This can also be an all-round question; those who manage big corporations must be risk takers. Corporate governance requires individuals who are able to think fast and act before the competitors take advantage of the situation. Fast thinking means increased risk. The level of risk which an individual categorizes as big will help you know whether the person is really a risk taker or not. The above question allows the interviewee to know how the person being interviewed deals with real life situations and what they consider difficult to them. This is a very common question during interview and the person answering should always answer it very honestly and openly. 4. What is your past experience pertaining the job category at hand? : Experience is a very important factor to consider in corporate governance. Successful corporations have a pool of qualified and experienced personnel to manage the affairs of the company. Experience provides additional advantage to both the individual and the corporation at large. At this stage the individual can also be given a chance to give details of his or her experience concerning their previous junior jobs and how they were able to rise in ranks up to the senior management. 5. What are your academic qualifications: This position is a very critical and sensitive position in any organization. An academic qualification ensures that the individual has adequate knowledge on the management and the running of the companies. Academicians are keen on the laws regulating the business practices, the ethics and environmental conservations. The post is managerial meaning much of the books will not be put into practice however knowledge on deal negotiations and methods of expressing his or herself are very important. The company requires a well-trained and qualified chief executive officer to manage its resources appropriately. In case of an occurrence of mismanagement, follow ups are usually made concerning the academic qualification of the person. 6. Does the CEO compensation cost the firm and could it be improved in some instances? : The executives should be paid in manner that encourages them to put more effort in the management of the organization so as to increase its productivity. Inappropriate compensations create a bad working environment and the top management can be fetched by other corporations who are offering a better pay. The compensations should be accessed regularly from time to time to ensure they are adjusted accordingly to the economic changes. The compensation should measure the standards and performance. The risks should also be catered for hen determining the level of compensation. Compensation thus plays a very big role in the general output of the human resource of the organization. Monitoring management is the process by which the project manager makes a follow up, analyses and revises the various projects of the organization in order to ensure that they are able to deliver to the desired objectives of the organization. There are various factors to be considered during monitoring management activities. These include: What is the clarity of the project that needed monitoring? : This requires the project manager to determine where the problem occurred, the personnel who were involved and when it happened. Big organizations require adequate project monitoring management. A single mismanagement of projects may results to bad image of the company by the general public (Hunter 6). They may even lead to loss of live, example is the petroleum explosion witnessed in Britain which claimed lives and injury to a large number. This was due to the inadequate monitoring. The management tried to evade the clear signs of the possible dangers of the explosions by covering them up the results were undesirable and lead to massive damages. 1. What are the long term and short term outcomes?: in most instances companies and organizations look at the short term impacts of certain projects while ignoring the long term, effects. The long term monitoring evaluation incorporates the community and the general public, such as those living in the nearby surrounding. How does the business activity affect them and incase of occurrence of an accident how prepared is the company to manage the scene and their compensations. For short term monitoring the questions involved should provide the answers to how the business is improving the skills and capabilities of the local personnel. 2. What are the plans which have been put in place to ensure proper monitoring of activities? : Proper personnel should be in place to ensure that the various projects of the firm are running as per the law previsions and ethics. The project manager are tasked with coming up with recommendations and suggestions concerning the various projects which are running. This information helps the monitoring management with insight encouraging them to act on the information provided before the condition worsen. Competent planning thus allows for a positive development process. It is thus the duty of all the companies to come up with the appropriate team to ensure that the firm is at per with these standards. 3. What are the factors to consider when carrying out evaluations? : Each and every problem presents itself with various solutions. The factors to consider when selecting a plan of action include analyzing the impact of the project and the possible risks which may arise a new when the path of action has been selected. The new risk might even be fatal than the previous, hence the team must recommend the appropriate line of action. When choosing the way forward the management must consider the impact on the environment, the governance principal, and the stake holders view concerning their decisions. The company must always live up to their vision and mission statement. 4. What are the implementation criteria for the projects? : The project implementation criteria are supposed to be very clear and precise also the project manager monitoring the project is assigned the task to ensure this is so. Incase this is a correction of previous damage; the changes should be followed up to the latter. The records should be available and stored appropriately and at a safer place. Proper implementation of the project by the monitoring management reduces incidences of accidents and smooth running of activities this also creates a safe working environment to the workers and the surrounding community. 5. How do they carry out validation of projects? : This is the major concern to the monitoring management. A proper validation criterion of the monitoring management is aimed at improving the quality of output and minimizes possible sources of errors. Validation means being certain that all the mechanism are in place and running. The quality of the key players must be accessed, ranging from the personnel to the non-human components in play (Hunter, 5). The integration of all this factors is responsible for the desired output hence meeting the companies’ goals and objectives. Validating the solution also plays an important role in the path to recovery and reconciliation. 6. Who constitute the monitoring management team? : The monitoring department is a critical department in every organization and their activities and decision determine the success or failure of the company. The team must comprise of the quality control personnel who ensure that the qualities are in line. They must be very aware of the radical changes in the business practices. There are some other factors which also greatly impact the general business activity of an organization. They include the company willingness to undertake risks, their board structures and the ethics. Risk management is concerned with the ways the company is able to manage any happenings which may not favor their business outcome. 1. What are the possible causes of risk? : the risk management team should be able to clearly define the possible source of risk concerning the business activity, for example for the British petroleum company the possible sources of risk could have been possible explosion when there us in appropriate monitoring, other risk which are evident could be theft of petroleum upon its transportation, However these risk are minimized when company laws and regulations are properly followed. Insurance companies also provide compensations when these are occurrence of a risk in which the client company has registered with them. Risk management should try as possible to minimize these risks to provide a safe working environment. 2. What criteria do they use to compensate individuals in case of occurrence of a risk? : appropriate mechanisms should be in place to ensure that those affected in case of occurrence of a specified risk are properly compensated and their status returned to the way they were financial before the occurrence of the risk. It is compulsory for all the company to be insured; both their workers and the neighboring community must be insured. Legal action is normally taken by the government to punish those companies who violate this agreement. Actions which are normally taken include withdrawal of practicing license among others. 3. How do they do risk assessment? : This involves how the company tries to identify the possible sources of harm, and how, evaluating the risk and appropriate controls. Appropriate risk assessment allows the individual firms to come up even with the appropriate method of minimizing the risk at hand. Occasionally there may be need to review the risk from time to time update the level of the risk and categorize it as a very serious risk or not. 4. Who are the individuals responsible for doing the risk assessment? : Individuals carrying the risk assessment should have the necessary qualifications in terms of analysis and coming up with the required recommendation. They may include the actuaries and other statisticians, individuals from the insurance company may also be incorporated when calculating the risk levels of the organizations. The data collected from the risk assessment can further be analyzed by external sources to ensure that they are genuine and there is minimal errors contained. The risk factors can then be explained to the other staff to help them determine which areas or activities are more risky and avoid such. The board structures of an organization constitute the senior management. They are the decision makers. 1. Who makes up the board of directors? : The board of directors is made up of the elected members, the chief executive officer and major stake holders. They initiates the activities of the firm, they are the key decision makers. Their decisions are translated as either loss or profits to the organization. It is thus important for a firm to have a competent and able board of directors for the smooth running and optimum profits to be incurred. Poor decision making by the board may lead the company to its downfall. 2. What do the boards of directors do? : The roles of the board of directors must be clearly defined, they range from the setting up the rules and regulation, and they are responsible for regulation recruitment of top officials. They come up with the necessary qualifications recommended for an individual to be recruited and are involved in retrenchment activities of the personnel in case of work malpractices. They are the brain of the organization as key decision either financially or ethically pass through them for approval. They carry out the rule making activity. 3. What factors can govern the board structure stand? : The stand of the board structure cannot be dictatorial as they are governed by certain guidelines. This may include the law of the land and the licenses’ revocations. The board structure is made up of human beings this means that their decisions are made with a deep thought for humanity. In case of bad decision there is license suspension. There are always very tough disciplinary measures taken to boards that violate the order of agreement. 4. How does the board structure handle various complaints externally or internally? : The board is tasked with hearing various complaints from the workers, the general public and the government. The board in some instances may set up a committee to listen to such complaints in case the issue at hand is not that sensitive but in case of very critical and sensitive matter they must sit down and come up with appropriate line of action to take. The board of governors is tasked with ensuring the organization interests is withheld and at the same time abide to its policies and objectives. The board structure thus must constitute of very vigilant and creative personnel. Every corporation has its own ethics of practice. Ethics refers to the methods by which the company organizes and carry out its production activities. They are aimed at achieving social interaction mostly with the general public and the government at large (Hunter 3). The factors to consider include: 1. What relevance do ethics institute in an organization? : in recent times companies have realized that they are not an island and do not exist in vacuums, they are surrounded by living society, how they interact with these members of the society will determine how the society which is the consumer relate to them in terms of their purchase and feedback. Provision and adherence to ethics reduces instances of misconducts. Integrity in business practices is very important and it provides a competitive advantage above other organization by creating consumer trust in your products. Ethics are thus a must observe practice for all the institutions. 2. How does an organization know that they have made the appropriate ethical decision? : Though it may sound a direct easy task but in instances of very large organization it may prove otherwise. There is usually what is called the ethical test which is aimed at knowing the effectiveness of the results in terms of a particular behavior being beneficial 3. What are the core values and how are they to be incorporated? : The organization needs to distinguish its core values from the normal routine values. These values are then to be translated to the employees and each one must be held accountable for them. These together forms foundation for cooperate governance in a system. The core values in most of the institutions include integrity, efficiency, reliability, transparency among others. They therefore transform to a well-organized system where the rights of everyone is respected. The ethical values above serve their importance when there are no rules concerning a specific issue and one is faced with a dilemma. 4. How is ethics accessed? : There are numerous institutions which are set up to review the ethics of other organization. In most of these cases they are tasked with accreditation. They give them inform of chatter marks. The accreditation analyses the company ethics n environment and social ethics. In the recent times companies have been under pressure to obtain this accreditation. These accreditations give the companies competitive advantages as the consumer knows that their products are produced in accordance with the law and does not cause any damage to the environment at large. There are also international ethical regulatory bodies whose accreditation gives a further advantage. Works cited Hunter, Trevor. British Petroleum (PLC) and John Browne: A Culture of Risk Beyond Petroleum. Richard Ivey School of Business, 2008. Print. Read More