Corporate Governance Implementation Strategy - Essay Example

? Corporate governance Introduction Corporate governance is controlled by the principles, which ensure the businessembraces a lot of integrity, accountability and transparency while dealing with employees and other stakeholders. With respect to this, it ensures that the business is conducted in accordance to ethics. Such principles should be adhered to in the decision making process while giving the right honors to the laws of the land. Fundamentally, people develop a lot of confidence and would wish to be associated with an organization that is perceived to be practicing good corporate governance. Moreover, evidence of working together as a team and the essence of synergy would always ensure sustainable competitive market. This is what is targeted as one of the most principle aspects by investors and its slightest brink make an organization susceptible to tragic downfall incase of scam or misappropriation (Geel 2011). Hawkama, an institute of corporate, being put in place by independent international institutions that teamed up together, was meant to reform good governance by helping the countries that participated in the treaty to have good financial and economic integration amongst them and other countries across the globe. The main mission of the Hawkama treaty was to help the countries involved develop good strategies necessary to improve universally, well integrated corporate governance. Besides, it was meant to enhance efficiency in relation to coordination, designing, planning and actual rolling of proficient corporate governance reforms. Moreover, the institution is equipped with the right assessment tools to help in determining the outcome of corporate governance policies at all private sectors. Hawkama article, however, recommended the following as the right governance steps (Bornstein 2005). Demonstrating commitment to good corporate governance For an organization to reap the benefits of good corporate governance, it must demonstrate its willingness of putting the practice to the later. All the stakeholders, which are considered as part and parcel to an organization must show commitment and join hands in working together towards building a single business case of corporate governance. For this to be effectively enacted, managers of the organizations and other leaders should be encouraged to attend talks about institutional good governance. Hypothetically, the article has given an illustration on how the commitment of leaders in an organization can actually motivate the members to produce substantially operational and markets and the higher profit results and this would attract more investors into such organizations (International Finance Corporation, Hawkamah 2008). Planning and setting priorities Organizations that expect to bear advantage of good governance, must seek to avail adequate measures that would ensure more attention is given to the important and urgent duties. This success is profusely possible only when an organization is able to make comparative difference between its performance and its competitor as a way of identifying the relevant governing principles. In this case, their right choice of practices is to avert any slightest action considered vise to the relationship of the organization either internally or externally with other stakeholders (International Finance Corporation, Hawkamah 2008). Implementing good board practices Board is considered as the key aspect where issues relating to corporate governance are strategized. In this case, the board plays the role of strategic guidance and oversight management during implementation of corporate governance. Besides, it carries out a mandate of a trustee to the shareholders. Most basically, how the board would fulfill its responsibilities is used as a determinant by investors to assess the potentiality of an organization. If the board is given an authority to run as an independent, professional and most predominantly a vigilant body, then it would ultimately succeed to the achievements of corporate governance of a firm. With respect to this, it influences the company performances by offering guidance and oversight management. Building robust control and environment process There is a need for a stronger control of environment that would compliment independent professional and guarantee trusts to the shareholders on how minimal vices are contemplated within an organization. Being controlled by the board management committee, the management should be responsible for the risks and remains accountable to the shareholders for company to run effectively in a free and fair environment (International Finance Corporation, Hawkamah 2008). Strengthening transparency and disclosure Is it absolutely hard for the stakeholders and other participants involved in the market to be able to monitor and hold the management liable in case of gross misconduct of governance or lack of transparency. Therefore, disclosure of transparency should take toll in such cases. Essentially, disclosure of transparency is considered very vital in quoted companies, which would substantially illustrate evidence of the relationship between shareholders, directors and the managers (International Finance Corporation, Hawkamah 2008). Protecting shareholders rights Shareholders are termed as the actual owners of the firm. They are bestowed the powers to dictate on how the management operates. Therefore, they have the obligation to secure method of registration; can transfer shares, access to the secrecy of the organization amongst other things. Good corporate governance should ensure the requirements of the employees are accorded as their quality protection would affect the depth of capital markets and the potentiality of the external investors (International Finance Corporation Hawkamah 2008). Amongst the items that can be implemented in order to have good corporate governance according to 02/2009-02/2010 documents includes corporate distribution of capital. An organization capital, which forms nominal value of ownership of the shareholders, should be equitably distributed with government and given an obligation to own its definite share as the founder shareholder taking a bigger portion of this value. This would be a clear illustration to potential investors that an organization is basically ruined under influence of good ethics (United Arab Emirates Secretariat Cabinet report 2012). Additionally, the document did give good use of company finance as an alternative. An organization is, therefore, expected to give full a true and fairer image to satisfactorily handle its accounts. It depicts that, as a way of illustrating good potentials to the investors or any other person outside to organizations then, clear audits of accounts should be published in accordance to international accounting principles (United Arab Emirates Secretariat Cabinet report 2012). Other points of concern were dispute solution technique of which assemblies were directed to drop any case that has been amounted to the board of directors while exercising practical approaches in line of duties (Bloomfield 2013). Some of the items which are regarded as the best principle steps in ensuring organizational good corporate governance but were not found in the hawkama article include the procedure for implementing a formal action plan. This basically involves identifying the prioritized areas of corporate governance and putting adequate measures into a more formal approach of an action plan. This is done to ensure that, all the partisans involved in an organization are completely made aware of what is suppose to be done and the reason of taking such actions. Formal plans are also necessary in creating accountability of all people involved in the governance transformation process. Ironically, another concerned step which was not highlighted in hawkama article is purpose allowance in accordance to the changing attitudes of the organization. With respect to this, most of the organizations will definitely have clear path to help improve their areas of governance practices. However, most of the organizations are still phased with the problem of aligning the vision of the people concerned in order to meet the changing attitudes and the objectives of the firm. Leaders in an organization has the potential of changing the perception of the stakeholders creating the momentum to better alternatives of seeking good governance that would otherwise ensure business sustainability and prosperity. The leaders themselves are regarded as champions who lead every one towards a definite goal of an organization (United Arab Emirates Secretariat Cabinet report 2012). Attitudes dynamics and adaptable believes together with the practical norms of an organization that would drive in information that it is a necessity to work in accordance to the will of the people as a way of demonstrating organizational good governance. Time plan for corporate governance implementation strategy Start at a smaller phase In order to avoid the tendency of diminishing morale at certain point when the execution of corporate governance is in place, therefore it is advisable to start at a small phase then grow gradually. For instance it is not recommended to simply implement an act in one day; such incidences will confuse the partisans and will make the governance planning impossible. Precisely, it is advisable to have governance focus on just an area as expansion is made to gradually roll it throughout the whole organization (Beylefeld et al 2012). Probe the stakeholders’ readiness Access the organizational culture and determine the stakeholders’ readiness towards such implementation. Ensure that policies and procedures for the system are defined. Moreover, questions should be asked as to whether the users are comfortable to embrace such policies. For instance, if the company has learn on how to implement such policies then people will basically embrace it with more practical approach (Beylefeld et al 2012). Form a governance committee Since governance is a practical approach to an organization, a cross functional board should be set in place to develop the plan. Membership should include key departments that are meant to feel the effects of the implementation. Clarity should be made to ensure that no violations of the laws governing the organization or the stakeholders are violated. The committee should be limited less than 10 to avoid paralysis during the decision making processes (Beylefeld et al 2012). Enforce the strategy into action At this stage, the governance policy is enforced into action either in an automatic way or gradually in some areas. Ensure that, governance is not felt in areas which are still considered inappropriate. Define governance policy in areas they are not enforced and if possible the legal constrains should be considered throughout all this process (Beylefeld et al 2012). Keep you governance plan fresh For sustainable governance plan, always ensure that the action s practiced more consistently ensuring that, information is up to date to all the stakeholders as they should find themselves as enforceable tools to propagate prosperity of this policy (Beylefeld et al 2012). Conclusion Positive conclusions has been drawn that, it is essential if all organizations would practice corporate governance to the later. With respect to this, stakeholders will exhibit satisfaction and this would help build in trusts of the potential investors. Organizations, which are committed to corporate governance has well defined policies of protecting the shareholders right, transparency, discloser and empowerment based on ethics. Bibliography: Geel, R., 2011. Strategic management: the radical revolutionary strategic management matrix for predators. [S.l.]: Trafford on Demand Pub. Bornstein, D., 2005.The price of a dream. New York: Oxford University press, cop. International Finance Corporation. Hawkamah. 2008. A Corporate governance survey of listed companies and banks across the Middle East. Washington, D.C. International Finance Corporation. Beylefeld, M. et al., 2012. Corporate governance: a practical handbook. Auckland, N.Z.: CCH New Zealand. United Arab Emirates Secretariat Cabinet report., 2012. Corporate Citizenship statues. Ministry of Cabinet Affairs. Bloomfield, S., 2013.Theory and practice of corporate governance: an integrated approach. Cambridge; New York: Cambridge University Press. HH Read More