Liezel R. Santosidad July 15, 2014
5BSA
CASE STUDY: WAR AT THE HELM OF ELICOR
CORE PROBLEM Paul Simon, chief executive officer (CEO) of Elicore, has drove the company on an accelerated growth since he joined the company as CEO in 1993. Along with the accelerated growth of the company, Mr. Simon's arrogance also increases which leads him to contravene board directives and abide to his own set of rules in managing the company. Thus, there is poor corporate governance which then results to poor internal control.
GUIDE QUESTIONS
1. Discuss the OECD principle on the responsibility of the board. How did the Board fare against the principle and what areas need to be improved? Why? Primarily, the board of directors is responsible for
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As the consultant of Elicore, I would recommend the following:
The board should clarify its role. The board plays a significant role in guiding, governing and overseeing the company. It should determine its role in the running of the business and make a clear understanding of which with management.
The board should monitor company performance. Monitoring the company's performance is a key board function and ensuring legal compliance is a major aspect of the board’s monitoring role. This will ensure that the decisions made are consistent with the strategy and with owners’ expectations. The most appropriate way of monitoring company performance is to identify the company’s key performance drivers and establishing appropriate measures for determining success. The board should establish an agreed format for the reports they monitor to ensure that all matters that should be reported are in fact reported.
The board should understand that they appoint, review, work through and replace the CEO. The board-CEO relationship is essential to implement an effective corporate governance since it distinguishes the board’s role in determining the company’s strategic direction and management’s role in achieving company objectives.
The board is responsible for the governance of risk. It should establish a sound system of managing risk and internal control.
The board should be provided with the information they
The board carries out the duties in regard to the interest of the companies’ shareholders, staff,
Another central feature of the board of directors is the question of whether the CEO is also the chairman of the board. When the CEO is also the chairman this is often referred to as “CEO duality”. In the US the CEO is often the chairman of the board. Studies have shown that the board in most cases
Common stockholders are the basic owners of a corporation, but few stockholders of large corporations take an active role in management. Instead, they elect the corporation’s board of directors to represent their interests. Board members seldom get involved in the day-to-day management of the company. They establish the basic mission and goals of the corporation and appoint
To ensure that the company thrives and overcomes the crisis that may come on the way, the company has various strategies and ways to overcome that and to keep the company on the track which includes constitution and board of directors which has various roles and responsibilities. The company has got a constitution and also corporations’ act. The companies’ values are the trust, integrity and honesty. The board carries out the duties in regard to the interest of the companies’
It is essential that the role, duties and responsibilities of directors are clearly defined. The Combined Code (2006) states that “the board’s role is to provide entrepreneurial leadership of the company within a framework of prudent and effective controls which enables risk to be assessed and managed”.
The board of director. The board of director should discuss enterprise risk management with management and t oversight the implementation. They need to ensure that most of significant risks have been
In large corporations the success or failure of the company is the responsibility of the board of directors. According to Richard DeGeorge, “The members of the board are responsible to the shareholders for the selection of honest, effective managers, and especially for the selection for the CEO and of the president of the corporation.” (p. 202). The board members have a moral responsibility to ensure the corporation is run honestly, in respect to its major policies, and to ensure the interests of the shareholders are satisfied. The next responsibility within a corporation is the responsibility management has to its board of directors. DeGeorge writes, “It must inform the board of its actions, the decisions it makes or the decisions to be made, the financial condition of the firm, its successes and failures, and the like.” (p. 202). The management of the corporation is morally obligated to
The article is written to help readers gain a solid understanding the roles of corporate governance, both inside and outside the company. Its goal is simply to impart information, not make claims or arguments on its own. I will be judging it mainly on the sources gathered, numerous examples and explanations given and the overall effectiveness it possesses in effectively communicating its ideas.
A Board of directors, in my opinion, is a body of one person or a group of people who should oversee the performance of a organization. The goal of Board of Directors is to protect the organization 's assets and to use source to
The Board is ultimately responsible for all that the organisation does but in order for it to discharge its responsibilities appropriately and effectively, day-to-day and operational management is delegated to the Chief Executive Officer and the SMT .
It is the board's responsibility to consider and authorize a suitable remuneration package for the company's chief executive officer (CEO), make recommendations with respect to the attractiveness of dividends and dividends pay out, approve stock splits, form the audit committees, approve the company's financial statements, oversee management’s involvement in the shareholders and other stakeholders long-term interests and recommend or discourage major decisions such as acquisitions and mergers.
The Key point of this case study is to identify and promote effective relationships between the board and the executive director. Clarity of roles and expectations is critical to having a successful board and executive director partnership. Regular communication is also an important component of a successful
Board members have the unmistakable responsibility of defining and measuring the organisations success, as well as their performance methods.
The Board of Directors plays an essential role in certain types of managed care companies. They assess the overall direction and strategy of any organization. A typical board can lower an organization’s risk profile by operating in a way that reduces its own liability and remains consistent with good governance. Also, the board members must try to avoid conflicts and must remain indulgent by performing their duties towards the benefit of the plan within the confines of the bylaws (Kongstvedt, 2013). According to the Nonprofit Risk Management Center (NRMC), “a board’s role in risk management reflects its commitment to the proper and successful operation of the nonprofit organization” (n.d.). Basically, the board’s responsibility begins with
The board will help set strategies, direction, vision, hire/fire top management, monitor and supervise top management, oversee the use of resources, and care for shareholders' interests (Wheelen & Hunger, 2006, pp. 36-37).