Talk:Corporate Governance/Archive 1
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[edit] Organizations
I deleted the Organizations section because the Organizations listed were already cited in the References/ Links section.
The user who added the Organizations section should create a Wikipedia entry for each Organization mentioned because, as someone has pointed out, this entry is getting too long. Those organizations may be involved in corporate governance but they do not help the entry. If you expand on 10 organizations, this is an unhealthy case of bias. Why choose these organizations to represent corporate governance of any country? That's why it's more appropriate they are mentioned in the References section but anything longer than that deserves an own entry.
23 June 2006
[edit] Previous
Insert non-formatted text hereCopied from other page now a redirect (by 194.154.129.7) Mark Richards 23:21, 18 May 2004 (UTC)
The modern trend of developing corporate governance standards and codes of best practice began in the early 1990’s in the United Kingdom, the United States and Canada in response to numerous problems, misdoings and scandals in the corporate performance of leading public companies of these countries, caused, among other reasons, by a lack of effective control mechanisms over management. The first documents published in this area, including the Cadbury Report in the U.K., the General Motors Board of Directors Guidelines in the U.S., and the Dey Report in Canada, have each proved influential sources for similar documents in other countries. Over the past decade, good corporate governance principles and codes have been developed in different countries and issued from stock exchanges, corporations, institutional investors, or associations (institutes) of directors and managers with the support of governments and international organizations. As a rule, compliance with these governance recommendations is not mandated by law, although the codes linked to stock exchange listing requirements may have a coercive effect. For example, companies quoted on the London and Toronto Stock Exchanges formally need not follow the recommendations of their respective national codes. However, they must disclose whether they follow the recommendations in those documents and, where not, they should provide explanations concerning divergent practices. Such disclosure requirements exert a significant pressure on listed companies for compliance.
In contrast, the guidelines issued by associations of directors, corporate managers and individual companies tend to be wholly voluntary. For example, The GM Board Guidelines reflect the company’s efforts to improve its own governance capacity. Such documents, however, may have a wider multiplying effect prompting other companies to adopt similar documents and standards of best practice.
Corporate governance issues are receiving greater attention in both developed and developing countries as a result of the increasing recognition that a firm’s corporate governance affects both its economic performance and its ability to access long-term, low-cost investment capital.
According to the definition offered by the Cadbury Report, corporate governance is a system by which business corporations are directed and controlled. The corporate governance structure specifies the relations, and the distribution of rights and responsibilities, among primarily three groups of participants – the board of directors, managers, and shareholders. This system spells out the rules and procedures for making decisions on corporate affairs, it also provides the structure through which the company objectives are set, as well as the means of attaining and monitoring the performance those objectives. The fundamental concern of corporate governance is to ensure the conditions whereby a firm’s directors and managers act in the interests of the firm and its shareholders, and to ensure the means by which managers are held accountable to capital providers for the use of assets.
[edit] Snore
The above three paragraphs really put me to sleep. If someone has had their No-Doz and sees any good info there, let's put it into the article. NuclearWinner 03:14, 14 Dec 2004 (UTC)
- Forget it. Copyvio from a Russian site. Mikkalai 06:19, 14 Dec 2004 (UTC)
- And half of the article itself, b.t.w.Mikkalai
[edit] Is this article getting too long?
The article seems to be getting a bit too lengthy and is becoming hard to manage. Any ideas on how it could be divided up? --Yu Ninjie 06:37, 20 Apr 2005 (UTC)
Totally agree. There are repetitions, unparalelism and not very niteresting paragraphs. Rodrigoleite 02:34, 29 November 2005 (UTC)
- As a general Wiki rule, I think histories of topics, if greater than a third of a page should be separately broken out. Comments? ⇒ normxxx| talk ⇒ email 20:59, 12 March 2006 (UTC)
There is a great new paper by Stuart L. Gillan "Recent Developments in Corporate Governance: An Overview" which gives a nice overview of the current Corporate Governance domain and how to divide it. It is downloadable via the sciencedirect website if you have a subscription to the Elsevier scientific magazine. It's in the Journal of Corporate finance 12.
If you want to divide the article, there is always the possibility of opening up a new article called "Good Corporate Governance", I've seen quite a few parts that could fit in there. You could also add references to optimal board size as defined in some scientific articles.
[edit] 128.84.178.76
slashing of the dividend at International Flavors and Fragrances
Aren't we getting a little personal? How does slashing a dividend (which hundreds of corporations do every year) rate with criminal malfeasance? Is any of the major players at IFF indicted for anything?
In the grand scheme of things, how important is this? ⇒ normxxx| talk ⇒ email 20:59, 12 March 2006 (UTC)
[edit] Deletion on 6 September and replaced with Spanish version
A user deleted the English version and replaced with the Spanish verison. Knowing some Spanish, it is CG but as this is the English version I've reverted it to the previous version. Below is the Spanish version as it appeared:
Corporate governance es el conjunto de procesos, políticas leyes e instituciones que afectan la manera en cómo la corporación es dirigida, administrada o controlada. Corporate Governance también incluye las relaciones entre los distintos actores involucrados y las metas por las que la corporación es gobernada. Los involucrados son : accionistas, directivos, también se incluyen los empleados, proveedores, clientes, bancos u otros prestamistas, reguladores, el ambiente y la comunidad en general.
Corporate governance está relacionada con "Accountability" y un estándar estricto de comportamiento, escencialmente para la implementación de lineamientos y mecanismos para asegurar el buen comportamiento y para proteger a los accionistas.
"Accountability" es ser responsable solidario, es decir, la obligación de aceptar las consecuencias del fracaso en cuanto al desempeño esperado.
Reglas reelevantes incluye leyes aplicables del país, así como reglas internas dela coorporación. Sistemas y procesos que están relacionados con asuntos como delegación de autoridad.
La estructura del gobierno corporativo especifica en detalle las reglas y procedimientos para la toma de decisiones en los negocios corporativos. Provee la estructura por medio de la cual la compañía fija sus objetivos, así como el logro y monitoreo del desempeño de los mismos objetivos.
Gobierno Corporativo es el mecanismo por el que los individuos son motivados para alinear su comportamientos con el de todos los participantes. Contents [hide]
* 1 Principles
* 2 Mecanismos y controles
o 2.1 Controles Internos del gobierno corporativo
o 2.2 Controles Externos al gobierno corporativo
* 3 Role de el contador
[edit]
Principles
Los elementos clave para un buen gobierno corporativo incluyen, la honestidad, confianza e integridad, apertura, orientación de desempeño, responsabilidad y accontability, respeto mutuo, y compromiso con la organización.
* Integridad y comportamiento ético: La organización debe desarrollar un código de conducta para los directores y ejectuvos que promueva la toma de decisiones ética y responsable.
* Disclosure and transparency: El proceso de revelar, hacer públicos los roles y responsabilidades para proveer a los accionistas un alto grado de accountability. Con esto se mantiene la integridad de los reportes financieros. La revelación de hechos materiales concernientes a la organización debe puntualmente balanceada para asegurar que todos los inversionistas tengan acceso a información clara.
Asuntos que cubre el corporate gobernance:
* vigilancia de la preparación de los estados financieros * controles internos y la independencia de los auditores * revisión de compensación para altos ejecutivos * la forma en cómo los individuos son nominados a posiciones en los consejos * los recursos a disponibilidad de los directores para llevar a cabo sus tareas * vigilar y administrar el riesgo * políticas de dividendos
[edit]
Mecanismos y controles
Los mecanismos y controles del corporate governance están diseñados para reducir las ineficiencias que provienen de la moral y selección adversa. Por ejemplo, monitorear el comportamiento de los gerentes, un ente independiente que certifique la exactitud de la información que los directores proveen a los accionistas. [edit]
Controles Internos del gobierno corporativo
Monitorea las actividades y las acciones correctivas para lograr las metas de la organización. [edit]
Controles Externos al gobierno corporativo
* deudores * auditores externos * regulaciones gubernamentales * presión de los medios * takeovers * competencia * mercado laboral directivo
[edit]
Role de el contador
El reporteo financiero es un elemento crucial para el funcionamiento efectivo del gobierno. Contadores y auditores son los principales proveedores de información a los participantes en el mercado de capitales. Los directores a título de la compañía esperan que se prepare la información financiera dando cumplimiento con los estatudos y obligaciones éticas, y se ponen en manos de los auditores competentes.
Un área de preocupación es si la firma contable audita y hace consultoría. Esto resulta en conflicto de interés que pone en duda los reportes financieros. El poder del cliente corporativo para iniciar y terminar la consultoría de servicios y más aún, seleccionar y despedir firmas contables contradice el concepto de un auditor independiente.
El colapso de Enron es un ejemplo de un acto tendensioso para llevar los reportes financieros a un error. Enron tuvo grandes pérdidas por crear ilusiones de que un tercero estaba contractualmente obligado a pagar la suma de muchas de las pérdidas. De cualquier modo, éste tercero era una entidad en la que Enron tenía una substancial participación económica. En discusiones de prácticas contables con (Arthur Andersen), el socio a cargo de la auditoría, las miradas son inevitablemente guíadas por el cliente generalemente.
De cualquier modo, un buen reporteo financiero no es suficiente condición para medir la efectividad de un gobierno corporativo si el usuario informado no puede ejercer un monitoreo debido por un alto costo.
[edit] Suggest move of PR and CG to PR
The following section is from the author of a paper on PR and CG. I suggest that the author do the following: 1. Improve the grammar and sentence structure eg "its image" rather than "it's image", "Public relations is a form of managerial profession" rather than "Public relations became a managerial profession" 2. Add bits of stakeholder theory mentioned in the passage to be added to the section of stakeholder theory. 3. Survey results must be backed by proper referencing methods. 4. The original source seems to be a working paper or unpublished thesis (?) rather than a refereed journal article 5. The passage is more relevant to the entry on public relations rather than CG. Suggest that once all of the above points have been met, that this be moved to "public relations" entry.
[edit] Public Relations and Corporate Governance
Public relations became a managerial profession in corporations, thus; public relations professionals counsel and participate in managerial decisions of organizations. In addition, public relations helps to manage relationships with the financial community, investors and stakeholders in order sustain organizational responsibility, tranparency and accountability. A company's share price is influenced not only by its financial performance but also by the perception investors have of the company. As a consequence, it is important to maintain reputation and image of the company which are the outcomes of consistent corporate behavior and good governance. Any kind of misconduct or mismanagement can drop a corporation’s share prices immediately. Through public relations a company can also manage it’s image and reputation which will enable the company to build trust and confidence in the financial community and society Therefore, it is important to have a qualified management structure with consistent and credible communication.[1]
Financial Communication & Investor Relations
As investors, markets and regulations have demanded greater transparency of company's accounting and strategy, the financial media has increased its coverage and monitored companies’ activities because businesses are really newsworthy for them. On the other hand, technological developments like internet quickened the communication facilities, so that, news can rapidly and easily be delivered all over the world. In addition, media become more sensitive towards operations of businesses and they leave more space to cover well known companies and brand names. As a result of this, companies tend to manage these relationships and they develop communication strategies to fulfill the needs of media for a better coverage which contributes to reputation of that company. Accordingly, a transparent company which conducts good communication with the financial community and general public via media will gain trust and confidence of financial community and media. Development of effective communication between companies and investment community is essential for corporate governance. Financial Communications is about communicating up to date corporate information to financial community and publics. In addition, it is setting and maintaining good relations with financial community. Finacial communication helps to create investor confidence and to overcome false perceptions in the market, which will in return increase the stock prices of a company.
A corporation must be trustable and fair to all kinds of public. This can be acquired through openness and transparency which are the most important elements of corporate governance. A company must be transparent to the financial community with their financial standings and must maintain regular disclosure activities.. On the other hand, a company must maintain regular communication with the financial community and must be responsive and prepared for unusual events which can effect the company’s financial situation. The company should try to avoid rumors about the company and control them continuosly.
Financial communications help to build interest to the company and to it’s stocks in the financial market so that companies which are transparent have easiness in attracting new capital. Through financial communication company can attract new investors. Also, public relations managers or investor relations specialists communicate with current shareholders of the company about current situation of the company and get their approval for financial activities. Public relations managers should seek to create shareholder loyalty. Moreover, financial communication increases company prestige and creates favourable opinions in the financial community. So that, employess of the company will be proud of that company and work efficiently. Financial communication and investor relations activities must be done in order to provide transparency and accountability to the company, because those are fundamental components of corporate governance codes.
Corporate Governance, Reputation and Stakeholder management
The stakeholder theory says that corporations should be run for the benefit of all “stakeholders,” not just the shareholders. Stakeholders of a company include any individual or group that can influence or is influenced from a companies practices. The stakeholders of a company can be suppliers, consumers, employees, shareholders, financial community, government and media. Companies must properly manage the relationships between stakeholder groups and they must consider interest of each stakeholder group carefully. Therefore, it becomes essential to integrate public relations into corporate governance to manage the relationships between these stakeholders which will enhance the organization’s reputation. Corporations or institutions which behave ethically and governed in a good manner builds a reputational capital which is a competitive advantage. According to Fombrun, a good reputation enhances profitability because it attracts customers to products, investors to securities and employees to its jobs. Company’s reputation is an asset and wealth that gives that company a competitive advantage because this kind of a company will be regarded as a reliable, credible, trustwothhy and responsible for employees, customers, shareholders and financial markets. In addition, according to MORI’s survey of about 200 managers in the private sector, 99% responded that the management of corporate reputation is very (83%) or fairly (16%) important.
A company which has a good governance, tend to be a good citizen in its community. So that, public relations professionals must work in coordination with the top management to shape a unique identity through coherent and consistent messages. Reputation is a reflection of companies’ culture and identity. Also, it is the outcome of managers efforts to prove their success and excellence. In that sense, good governance principles must be injected into the corporate culture. It is a fact that corporations with good governance structures seem to be more credible in the eyes of public and investors. Ethical business practices increase financial earnings of a company.
Reputation is sustained through acting reliable, credible, trustworthy and responsible in the market. It can be supplied by consistent communication activities both internally and externaly with key stakeholder groups. This directly influences a public company’s stock prices in the financial market. Therefore, this repuation makes a reputational capital as a strategic asset and advantage for that company. As a consequence, public relations must be used in order to establish long lasting relationships with the stakeholders, which will enhance the reputation of the company.
