Corporate Governance Essay Example for Free

incarnate Governance EssayIn a commercial organisation, the wag of directors is typically charged with the key responsibility for corporate governance protecting the rights of sh arholders and creditors, ensuring contractual obligations and regulatory respectfulness. In the public sector, the elected brass is typically responsible for corporate governance, and in semi-government and statutory bodies like secern Rail, Sydney Water, the Australian Broadcasting Authority, the University of NSW, and so on and in not- for-profit organisations governments volition usually mandate a body similar to a board of directors with the responsibility for corporate governance. What does corporate governance involve? In a recent article, Gomez Korine (2005, pp. 739-752) direct that Corporate governance can be understood as a set of contracts that defines the relationships among the tether leash actors in the corporation.To simplify what this actually means, corporate governance is the set of relationships where A key stakeholder whom they refer to as the sovereign (in the case of commercial organisations this would be the sh atomic number 18holders in the case of public sector agencies, the elected government for not-for-profit organisations this is often the members or other key stakeholders as defined by legislation) sets in localise a governing body (eg, board, council, senate, etc) with responsibility for over knock againsting the actions of the governer (management, staff, employees, volunteers, players, etc) Increasingly, societies and governments are reacting to a rapidly changing domain surrounding them, and modifying the regulations change corporate governance accordingly. The numbers and enkindles of stakeholders who are affected by the actions of organisations is expanding. Organisations are being seen to impact on the economy the natural environment fiat through opportunities for turn over and employment conditions of work family life, etc C onsequently, in that location are increasingly complex expectations placed on organisations of all sizes to consider and take responsibility for decisions and actions beyond exclusively their money making or other purposes and goals.Corporate governance covers a large number of discrete concepts and phenomenon as we can see from the definition select by Organization for Economic Cooperation and Development (OECD) Corporate governance is the system by which dividing line corporations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation, such as, the board, managers, pctholders and other stakeholders and spells out the rules and procedures for making decisions in corporate affairs. By doing this, it withal provides the structure through which the comp whatsoever objectives are set and the means of attaining those objectives and monitoring performance1. From this definition we see that corporate governance includes the relationship of a comp any(prenominal) to its shareholders and to society the promotion of fairness, transparency and accountability character reference to mechanisms that are used to govern managers and to ensure that the actions taken are consistent with the interests of key stakeholder groups.The key points of interest in corporate governance therefore include anaesthetizes of transparency and accountability, the legal and regulatory environment, appropriate bump management measures, information flows and the responsibility of senior management and the board of directors. Harshbarger and Holden (2004) point out that while numerous of the governance issues that organizations face are not new, the environment in which they confront them is to a greater extent challenging than incessantly State and Federal law enforcement allow applied significantly increased resources and a much high-pressure philosophy toward confro ntation of governance lapses the media spotlight has increased awareness among those constituents directly affected as comfortably as the telephone circuit community as a whole shareholder proposals are taken more seriously and the judiciary has demonstrated its willingness for a more stringent definition of good faith. As well, there are a number of factors that have brought ethical issues into sharper focus, including orbicularization, technology and rising competition.Van Beek and Solomon (2004) as well note the ability to deliver a professional service will necessarily take place in an environment in which there is an increasing tendency towards individuality, while society as a whole becomes more global. The new realities of corporate governance show that no entity or agent is repellent from fraudulent practices and have altered the way companies operate they have re-defined the baseline for what is considered prudent conduct for headachees and executives (Dandino, 2004). incorporate STRATEGY Strategy can be developed at many levels in a multi-layered organisation there may be Corporate level outline decisions made for the whole corporation or organisation to gain the better of adversaries or attain ends. Business unit or divisional strategy decisions made for the business unit or division to gain the better of adversaries or attain the business units end. Functional strategies such as marketing/finance/human resources/IT/technology/ operational/production/etc. strategies. There would be marketing decisions (or finance or HR decisions, etc) designed to get the better of an obstructor or attain a marketing/finance, etc, end. So what do we mean by ends?Other ground that are frequently used here for the same concept are goals or missions or visions. Organisations typically have (or should have) a set of goals, desired outcomes or a view of their purpose (mission), or their upcoming achievements and positions (visions) in mind. Ideally these are clear articulated and understood by e preciseone in the organisation. When these ends (goals, mission, vision) are clearly understood, then the board, management, staff and partners of the organisation are able to develop strategy to achieve these. What is a strategic plan? A plan, whether strategic, tactical, operational, marketing, finance or whatever is really in effect(p) a set of decisions that have been captured in some form (document, web page, PowerPoint presentation, video, etc) that set out the answer to three key questions 1. Where are we now? 2. Where are we going? 3. How will we get there? Accordingly, a plan is formed by analysing the existing and expected future trends and factors affecting the organisation/business unit, etc setting down clear statements of the outcomes that will help to achieve the ends that the organisation has set itself (these statements of outcomes are commonly called objectives) describing some tactics and actions that will entrust to ach ieving the outcomesETHICS IN A GLOBAL ENVIRONMENTThe dawn of a global knowledge society with information-driven economies and expansion of cross-border trade as consequences of liberalization and globalization policy is placing new demands on business organizations for more innovative approaches in business ethics at both local as well as global business environment (Nissanke and Thorbecke, 2005). This premise is consistent with Brownlie et al. (1999) who indicate that What is it like to think new thoughts to untie the fragile web of assumption to render new images to the familiar to look anew at the world to see the ordinary and everyday from a fresh perspective? Many research scholars at present share this view and indicate that what they took for granted, assumed, believed and worked towards has been upended by those who argue that in order to get it right in a global business environment, organizations must rethink their business ethics approach. Sheth and Sisodia (1999) as well as support this assumption by asserting that, the context of ethics in global business environment is changing in fundamental ways.The acceptance of law-like generalizations has to be, as they suggest, Either enhanced or modified. The old opinion of business ethics as an oxymoron, or that business organizations do not have ethics (Laczniak and Murphy, 1993) is being re-thought. The business ethics is increasingly being called into question from various quarters (Brownlie et al., 1999) and research scholars are developing the fudge factor in order to challenge the ethical complacency that existed in the past. Business ethics is ultimately the ethics of power, of how to handle the power of business and how that power is acquired, increased and exercised. The need for ethics in business has never been greater, precisely because the power of business was never so manifold and as extensive as it is today (Mahoney, 1997). The term ethics has generally been used to refer to the rul es and principles of right and wrong conduct. It therefore boils down to morality and good or bad conduct.Business ethics are a set of rules that stipulate how businesses and their employees ought to endure (Aldag and Stearns, 1991). DiPiazza (2002) says I see ethics as a mission-critical issue. deeply embedded into who we are and what we do. Its just as important as our product development cycle or our distribution systemits active creating a culture based on integrity and respect, not a culture based on dealing with the crisis of the dayWe speak to ourselves every day, Are we doing the right things? Sheth, Gardner and Garret (1988) opine that ethical decision-making in a business environment is very complex, and that allegedly guilty business practitioners have quite in truth stated that they honestly did not realize that their actions could possibly create ethical problems. Business organizations operating at international levels often find that many countries differ in what i s considered wrong or right in a business market.IN TERMS OF SONY ETHICSEthical business conduct and compliance with applicable laws and regulations are fundamental aspects of Sonys corporate culture. To this end, Sony has yielded a Global contour Network comprised of the Compliance variation at the corporate headquarters, a global compliance leadership team, and regional offices around the world adopted and implemented the Sony stem Code of Conduct and set up Compliance Hotline systems through its Global Compliance Network all in order to reinforce the Companys worldwide commitment to integrity and help retard resources are available for employees to raise concerns or seek guidance about legal and ethical matters. In July 2001, Sony Corporation established the Compliance Division, charged with exercising overall control over compliance activities crosswise the Sony conference, to emphasize the importance of business ethics and compliance with applicable laws, regulations and internal policies.The Compliance establishes compliance policies and structures for the Sony Group and performs crisis management functions. In July 2003, Sony established a regional compliance network comprised of offices in the Americas, Europe, Japan, East Asia*1 and Pan-Asia,*2 which are charged with exercising regional control over compliance activities to strengthen the compliance system throughout the Sony Group. Officers responsible for compliance in each region have the authority to issue instructions concerning compliance to Sony Group companies in their respective regions and, by cooperating with one another, are working to establish and maintain a comprehensive global compliance structure. To further reinforce global compliance efforts, a Compliance Leadership Team was formed in September 2009 as an assentingal component of the global compliance organization.The Compliance Leadership Team assists the Sony Corporation General Counsel and Compliance Division in identifyi ng, developing and implementing key compliance strategies and compliance-related measures encourages more active participation in Group-wide compliance activities from a big group of key Sony personnel by involving not only the Regional Compliance Officers but also experienced legal/compliance personnel from Sony Group companies and creates a global framework that by its very structure highlights the companys compliance priorities and commitment to best practices. *1Coverage area of East Asia compliance office Mainland China, Hong Kong, Taiwan and southward Korea *2Coverage area of Pan-Asia compliance office Southeast Asia, Middle East, Africa and Oceania *3 The Americas Office is responsible for Sony Corporation of America, the Sony Pictures diversion Group, and the Sony Music Entertainment Group, in addition to the Electronics Group companies in the Americas Region.The Sony Europe, East Asia and Pan-Asia Offices are responsible for the Electronics Group companies in their respec tive regions. The Japan Office is responsible for Sony Corporation, the Sony Computer Entertainment Group, and Sony Financial Holdings, in addition to the Electronics Group Companies in Japan CORPORATE GOVERNANCE Sony is committed to strong corporate governance. As a part of this effort, in 2003, Sony adopted the Company with Committees corporate governance system under the Companies Act of Japan. In addition to complying with the requirements of applicable governance laws and regulations, Sony has introduced its own requirements to help improve the soundness and transparency of its governance by strengthening the separation of the Directors function from that of management and advancing the proper functioning of the statutory military commissions.Under Sonys system, the hop on of Directors defines the respective areas for which each of the Corporate decision maker Officers is responsible and delegates to them decision-making authority to manage the business, thereby promoting th e prompt and effective management of the Sony Group. Sony Corporation is governed by its board of Directors, which is appointed by resolution at the shareholders meeting. The Board has three committees (the Nominating Committee, visit Committee and Compensation Committee), consisting of Directors named by the Board of Directors. Corporate Executive Officers are appointed by resolution of the Board of Directors.In addition to these statutory bodies and positions, Sony has Corporate Executives who carry out business operations at heart designated areas. Board of Directors Determines the fundamental management policies of the Sony Group Oversees the management of Sony Groups business operations Appoints and dismisses the statutory committee members Appoints and dismisses Representative Corporate Executive Officers and Corporate Executive Officers Nominating Committee Determines the content of proposals regarding the appointment/dismissal of Directors Audit Committee Monitors the pe rformance of duties by Directors and Corporate Executive Officers (with respect to processes in place to ensure the enough of the financial reporting process, to enable management to ensure the effectiveness of internal control over financial reporting, to ensure timely and appropriate disclosure, and to ensure compliance with applicable law, Articles of Incorporation and internal policies).Monitors the status of any other items described in the Internal Control and Governance Framework determined or reaffirmed by the Board of Directors in accordance with the Companies Act of Japan. As part of its monitoring, attends the Nominating Committee and Compensation Committee meetings. Oversees and evaluates the work of the independent auditor (including to evaluate the adequacy of its independence and its qualification, to propose its appointment/dismissal or non-reappointment, to honor its hire, to evaluate the appropriateness of its audit regarding the financial results and internal control over financial reporting, and to pre-approve its engagement for any services other than audit services to be provided)Prepares the Audit Committee Review study in which the Audit Committee expresses its opinion on the performance of duties of Directors and Corporate Executive Officers, on the Business Report and on the independent auditors audit procedures and results based on its review activities including review of the matters subject to the Committees opinion in the Audit Committee Review Report. Compensation Committee Sets policy on the contents of individual compensation for Directors, Corporate Executive Officers, Corporate Executives and Group Executives, and determines the amount and content of individual compensation of Directors and Corporate Executive Officers in accordance with the policy Corporate Executive Officers Make decisions regarding the execution of Sony Group business activities within the scope of the authority delegated to them by the Board of Direc tors Corporate Executives Carry out business operations within designated areas, including business units, headquarters functions, and/or research and development, in accordance with the fundamental policies determined by the Board of Directors and the Corporate Executive Officers