Corporate Governance in the Hershey Company

Hershey is a widely respected brand name and as a fact is the largest producer of quality chocolate in North America and considered as global leader in chocolate and sugar confectionery. With history dating to 18th century, Hershey competes with Nestle and Cadbury to dominate global confectionary business. The main product lines include chocolate and confectionery products; food and beverage enhancers, such as baking ingredients, toppings and beverages; and gum and mint refreshment products. Corporate strategy of Hershey is focused to deliver growth and capitalize by diversifying its brand in the global market.

Since the board is accountable for official capacities, and as the CEO is in charge of coordinating organization strategy into

Corporate entities of all types need a governing body. In the case of a company, this is its board of directors. Corporate entities governed by a board of directors face the central challenge of the agency issue. Whenever a principal has to rely on agents to handle his or her business, governance issues arise. (Tricker 2012)

As Canadian Coalition for Good Corporate Governance indicates that the good governance of a corporation is essential to creating long-term sustainable value and reducing investment risk. In other words, the high quality performance of board directors plays a key role in the success of a corporation. We evaluate it based

Prior to the advent of the Sarbanes-Oxley Act of 2002, referred to herein as “SOX,” the board of directors’ pivotal role was to advise senior leaders on the organization’s strategy, business model, and succession planning (Larcker, 2011, p. 3). Additionally, the board had the responsibility for risk management identification and risk mitigation oversight, determining executive benefits, and approval of significant acquisitions (Larcker, 2011, p. 3). Furthermore, for many public organizations, audit committees existed before SOX and provided oversight of internal processes and controls. Melissa Maleske (2012) advised that the roles and responsibilities of the board were viewed “…from a perspective that the board serves management” (p. 2). In contrast, Maleske (2012) noted that SOX regulations altered the landscape “…to a perspective that management is working for the board” (p. 2). SOX expanded not only the duties of the board and the audit committee, but also the authority of these bodies (Maleske, 2012, p. 2).

To the extent of prevention of corporate failure, I argue that three ASX principles and recommendations could halt the demise of Dick Smith. Firstly, the 2nd principle which is “Structure the board to add value” by structuring the board with a majority of independent directors would prevent CEO dominance because some suggest that independent outside directors can reduce the influence of dominant individuals (ASX, 2014, p. 17). In accordance with Gallagher and Bennie (2015, p. 20), the independent directors are likely to focus on the company’s objectives and not to make decision relying on others. Furthermore, an addressing of independent directors would reduce the reliance on management, and create the effectiveness on monitoring (Dechow et al. 1996 cited in Christensen, Kent, and Stewart (2010)), as well as capability to lessen the conflict of interest between managers and shareholders (Hardjo & Alireza, 2012, p. 4). Thus, DSE’s board would be more active to monitor the CEO’s performances because independent directors pay attentions to the interest of company (Gallagher & Bennie, 2015, p. 20) and shareholders (Hardjo & Alireza, 2012, p. 4)

“The Hershey Company” was founded by Milton Hershey in 1909. In 1894 they decided to produce a sweet chocolate as a coating for his caramels. The company was originally located in Lancaster Pennsylvania. The company is now headquartered in Hershey, Pennsylvania and is a global confectionary leader. They are known for their chocolate, sweets, mints and other snacks.

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.

According to the experiment when social relationships were disclosed as part of director-independence regulations, board members didn’t toughen their oversight of their chief-executive pals. Rather, the directors went easier on the C.E.O., perhaps believing that

The proposed sale of Hershey Foods Corporation (HFC) during the summer of 2002 captured headlines and imaginations. After all, Hershey was an American icon, and when the company’s largest shareholder, the Hershey Trust Company (HSY), asked HFC management to explore a sale, the story drew national and international attention. The company’s unusual governance structure put the Hershey Trust’s board in the difficult position of making both an economic and a governance decision. On the one hand, the board faced a challenging economic decision that centered on determining whether the solicited bids provided a fair premium for HFC

Harley Davidson has been identified by some in the press as having weak corporate governance. This could be true for a myriad of reasons including directors not preforming their fiduciary obligations by putting their personal goals ahead of the goals of the true owners; the stockholders. Weak corporate governance can be very hard to identify in many instances. The decisions a board makes can take years to come to fruition, so identifying poor governance could be extremely delayed. Stock price or company health is also not a good indicator in all cases such as in the case of Tenet Healthcare. The CEO, Jeffrey Barbakow, delivered six years of record growth when the company imploded in 2002. (https://www.forbes.com/forbes/2003/0512/106.html). Tenet was investigated for Medicare fraud and was ousted from the board and the stockholders in turn suffered great losses. Guarding against having a board that engages in poor governance can be mitigated by ensuring that most of the members are independent directors. This alleviates most of the possibility of conflict of interest. In examining Harley Davidson to better understand their governing process, we will try to answer some basic questioned gleaned from their article of incorporation, bylaws, and stockholder’s agreements located on their corporate website. The first question, and one of the most important as it relates to independence is, “Are the CEO and Board Chairman the same person?” In this case, Harley Davidson’s board does

In 2002 the Hershey trust company board decided to sell school shares from Hershey stock. The board wanted to sell the 33% of Hershey shares at premium and reinvest the money in another company to make profit for the school. The board was responsible to oversees the investment and make sure the school was doing fine. Looking on this issue as financial personnel the board decision was better to sell stocks at premium and reinvest in another company.

The proposed sale of Hershey Foods Corporation (HFC) during the summer of 2002 captured headlines and imaginations. After all, Hershey was an American icon, and when the company’s largest shareholder, the Hershey Trust Company (HSY), asked HFC management to explore a sale, the story drew national and international attention. The company’s unusual governance structure put the Hershey Trust’s board in the difficult position of making both an economic and a governance decision. On the one hand, the board faced a challenging economic decision that centered on determining whether the solicited bids provided a fair premium for HFC shareholders. On the other hand, the governance decision required the

The Hershey Company, known until April 2005 as the Hershey Foods Corporation and commonly called Hershey 's, is the largest chocolate manufacturer in North America. Its headquarters are in Hershey, Pennsylvania, which is also home to Hershey 's Chocolate World. It was founded by Milton S. Hershey in 1894 as the Hershey Chocolate Company, a subsidiary of his Lancaster Caramel Company. Hershey 's products are sold in about sixty countries worldwide. In addition, Hershey is a member of the World Cocoa Foundation. The company has been topped to 384, compared with the previous rank 404, in 2013 (CNN, 2013). This paper is going to show the company’s international environment,

The hershey food cooperation is a confectionery kind of industry that was founded in 1894 by Milton Hershey who is a candy-manufacturer who decided to try adding chocolate to his caramels; transforming the name of his enterprise the Hershey Chocolate. This new factory was located strategically near dairy farms and surrounded by the spirits of hardworking people , by 1900 production of the delicious mil chocolate took place. Followed that, the launch of so many