Corporate Governance — Assessable Discussions Essay Example
Assessable discussion 1
Corporate governance are systems and structures put in place to direct and govern organizational management in formulating goals and objectives and developing means in which the developed goals and objectives will be attained and how performance monitoring will be determined as defined by Monks & Minow (2008). It incorporates how firms are run, their corporate and organizational structures, their organizational cultures, their policies, strategic plans and means in which the firms handle its varied stakeholders such as shareholders, employees, top management, customers and investors among others.
Adoption of corporate governance principles in the Commonwealth public sector since the 1990’s were and are still are meant to enhance accountability, compliance to set laws and policies, transparency, reliability, stewardship, inclusiveness, leadership and competence in service delivery to the people by both the public and private sector governance as suggested by Monks & Minow (2008).
The commonwealth public sector has embraced corporate governance principles too freely and without consideration since the corporate governance principles meant to foster excellence and effectiveness in corporate governance in the commonwealth public sector has not yet fully been realized. Although the principles are routinely evaluated and updated every so often to ensure they are aligned to the emerging corporate environments and development in the Commonwealth and universally, the sector has been marred with allegations of unfairness, corruption, bureaucracy and power rigidity. This is crucial in enhancing competitiveness and proficiency in service delivery that meet international standards.
What the commonwealth public sector has failed to do is to adhere to set code of ethics for public enterprises, safeguard against corruption, failed to alter public systems and structures to accommodate new changes that will ensure the corporate governance principles are enacted and thus, anticipated outcomes are attained. In addition, the use of one size, fits all model to manage the public sector within the Commonwealth has and still remains unsuitable for managing governance since member states are in varying economic growth and development.
The importance of corporate governance principles for commonwealth public sector and private and public sectors globally, cannot be emphasized as it generates efficiency, sustainability, competitiveness, profitability and credibility of the commonwealth public sector as highlighted by Solomon (2010) .
Having taken a wrong turn, that’s why the federal government embraced most of the recommendations suggested by Uhrig’s review that developed key good governance principles that includes the need for statutory authorities to develop an understanding of accomplishments and performance expectations. Additionally, development of governance structures and central agencies that are suitable to the nature of ownership and its responsibilities, power sharing, clarity of the role of governance, accountability and the board of directors having the power to act, appoint, monitor, change senior management and approve plans as highlighted by Uhrig Report (2011). Adoption of the recommendations was meant to improve performance, efficiency, accountability, inclusion and transparency of commonwealth statutory authorities.
I do not concur with the approach the Federal government has taken since this will place more significance of informal relationships between the public and statutory agencies over agencies’ definite performance outcomes, putting more emphasis on ministers and departmental secretaries being responsible instead of appraising the proficiency and competence of the parliament and increased need for enhanced accountability structures for the public sector rather than focusing more on evaluating the regulatory functions within government divisions. In addition, implementing the recommendations means that regulatory agencies are exposed to regulatory restrictions, the federal government overlooks analysis of statutory authorities and it offers analysis of statutory authorities to the departmental secretaries rather than placing the responsibility to the Parliament.
The AWB scandal exposed massive underhand corruption before and long after the privatization of the company. The Uhrig’s review pointed towards the lack of transparency, role clarity, communication and commitment to accountability within the public sector and management structures (Uhrig Report, 2011). The scandal would not have materialized if efficient communication and accountability were practices as AWB would have been warned and necessary actions taken. Owing to communication disintegration, lack of clear role clarity and diminished accountability as suggested by Uhrig’s review between the government and board members, AWB was drowned in corruption.
Assessable Discussion 2
Corporate social responsibility are systems and structures that are used by firms as self regulating systems meant to ensure firms adhere to applicable laws and regulations, ethics and internationally acceptable policies and standards as defined by Werther & Chnadler (2010). Through CSR, firms are made accountable to their actions and they are able to give back to their community, labor forces, end users of their products and services and stakeholders among others.
CSR is a concept that business firms should embrace if they already have not done so as it is a means of enhancing their competitive edge and giving back to their stakeholders. Through CSR, firms are able to be held accountable to their actions and their adherence to set international standards regarding quality management, environmental conservation and occupational health and safety among others (Werther & Chnadler, 2010). In addition, it helps firms to be integrated into the community essential in identifying the community’s needs, preferences, tastes and expectations and thus, effectively and efficiently satisfying them which leads to community satisfaction, profitability and increased brand loyalty. CSR foster healthy external relationships and collaborations vital to mitigate against operational risks. Due to the fact that due to globalization communities are more aware of their rights and the buyer bargaining power has significantly increased, businesses have no option but to embrace and implement CSR structures and systems as part of their regular operational strategies as supported by Werther & Chnadler (2010).
I partially agree with Hawken’s sentiments, as more and more businesses are focusing on enhancing their profitability ignoring their CSR. This approach however, has cost many a firms financially as communities have boycotted their brands and at worst permanently switched to alternative brands that foster CSR. Therefore, in the recent past more and more firms have invested substantial amounts of its investment to CSR with the view that as much as they would anticipate increased profits, they care and mind about the social and environmental welfare of the surrounding communities as mentioned by Hawkins (2006). The key is to strike a balance between economic and CSR initiatives and ensuring CSR is aligned and integrated into a firm’s business strategies which will ensure anticipated CSR and economic outcomes of the firm are effectively and efficiently attained without one variable overshadowing the other. Clear CSR frameworks, policies and regulations need to be put in place to ensure each firm integrates CSR in its operations and thus made measurable to get sustainable profits or cost of a firm over another.
The government has a role to play in CSR. It entails developing and implementing CSR policies and guidelines that ensures there is one standard CSR framework used across companies to appraise a company’s CSR performance outcomes. Markets on the other hand, can provide CSR assurance systems and structures that verify a firm’s compliance to CSR standards and ethics.
Assessable Discussion 3
The three key CSR issues covered in the documentary are core values of Nokia as a multinational, compliance to applicable environmental, labor and quality laws and use of CSR as a strategic tool of building and maintaining a quality brand name and reputation.
Nokia, as a market leader in telecommunication industry integrates its CSR to its business strategies meant to improve its sustainable competitive advantage. Focusing on its values ensures the firm makes it known what forms the basis of its business and what standards guide the behavior and conduct of Nokia as a business enterprise. This is essential in ensuing that the firm remains accountable to its activities and remains committed to ensuring the company’s goals and objectives are aligned to the needs of the community as described by Hawkins (2006). Compliance to applicable laws especially labor laws ensures that employees are exposed to favorable working conditions that respects their basic human rights as employees and as human beings. Putting more emphasis on depicting the brand as quality and decent is meant to influence the community’s perceptions and validates the company’s position in the community and their involvement to ensuring safety, security and satisfaction among its stakeholders.
After the findings that half of the suppliers did not comply with labor laws while others changing their standards for Nokia production line in China show variance in the importance that is placed in CSR among global economies and companies. What Nokia can do is to collaborate with its suppliers in educating them on how important CSR is for firms and especially so for Nokia. In addition, Nokia can develop CSR measures and policies for its suppliers to help guide them and placing CSR compliance as a contract clause that would lead to contract termination if suppliers do not strictly adhere to CSR measures and guidelines.
The major impediments for Nokia in improving CSR in China includes cultural differences, language barrier and legislative restrictions which will consume substantial amount of resources as the firm seeks to iron out the existing differences and fostering uniformity. The increased emphasis placed on traditional models of making profits that leave little or no room for CSR models. This provides a challenge for a company such as Nokia to convince Chinese managers that CSR can be a platform of enhancing profitability. Lack of compliance to international labor laws in China in relation to minimum wages, paid overtimes, employment contracts, code of ethics and unwillingness to embrace CSR are among issues that blocks Nokia’s effort to improve CSR in China.
The statement ’If Nokia were serious about CSR they would not set up factory operations in China’ is rather misplaced since succeeding in business is all about taking risks and encountering challenges head on and not running of. China is among the most rapidly growing economies in the 21st century and therefore, stopping operations in China, means losing a substantial market share presently and in the future. China just as majority of developing economies are easily warming up to changes in order to remain viable and feasible in existing turbulent modern environments, and among such are innovative ideas like CSR. What Nokia needs to do is to illustrate to the Chinese suppliers and the government the benefits of CSR, creating CSR awareness, and showing them the negative implications of lacking strong CSR systems in place. By so doing, it won’t take long, for Chinese suppliers to adhere to CSR systems and encourage each other to do so, in order to accrue the associated outcomes/ benefits of CSR.
Hawkins, D.E. 2006. Corporate social responsibility: balancing tomorrow’s sustainability and today’s profitability. London: Palgrave Macmillan.
Monks, R.A., & Minow, N. 2008. Corporate governance. New York: John Wiley and Sons.
Solomon, J. 2010. Corporate Governance and Accountability. New York: John Wiley and Sons.
Uhrig Report. 2011. The Uhrig Report and the proposed changes to EFIC. Accessed from http://www.aph.gov.au/senate/committee/fadt_ctte/completed_inquiries/2004-07/eficab06/report/c02.htm on the 14th May 2011.
Werther, W.B., & Chnadler, D. 2010. Strategic Corporate Social Responsibility: Stakeholders in a Global Environment. London: SAGE.
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