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Case Study: War at the Helm of Elicor

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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 …show more content…

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

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