Corporate Governance Assignment: Sustainability, Ethics AndFinance
Task: How to prepare a Corporate Governance assignment that critical analyses and discusses finding for Corporate Governance and Sustainability in the context of contemporary organisations?
Subject Linethis Corporate Governance assignment focuses on the period during and post Covid-19 pandemic, with reference to stakeholders and society engagement of business
As per Bhagat & Bolton(2019), corporate governance refers to the set of processes, mechanisms and relationships that are implemented by different parties for controlling and operating a corporation. The aim of this professional email is to communicate to the management of the company, the significance of corporate governance. The world has realised the importance of corporate governance and sustainability during the Covid-19 pandemic. The contemporary organisations are in need of incorporating and imbibing the essence of corporate governance.On this Corporate Governance assignment it is observed that during the pandemic the companies started acknowledging the role of corporate governance in running an organization. Corporate governance is crucial because it facilitates creating a system of practices and rules which determine the way in which a company would be operating. It further aligns the stakeholders’ interest with the company’s operations. The company’s with good corporate governance results in ethical practices in business. This further ensures financial viability (Ltifi & Hichri, 2021). In this email, how the pandemic has rewritten the rules of corporate governance will be mentioned, the significance will be conveyed to the managers and a critical analysis will be presented.
Critical Analysis performed on this Corporate Governance assignment
The critical analysis will highlight how through corporate governance better and structured attention will be given to the stakeholders. In the agency-based corporate governance model, shareholder primacy occupies a core area. The stakeholders during the Covid-19 pandemic have realised the significance of knowing the ability of a company to function during crisis situations. During the Covid-19 pandemic, the companies have been struggling as they have lost their customers (Gelter & Puaschunder, 2020). The workforce has also reduced to minimum with only the essential individuals employed. The supply chains have been disrupted, the capital has been insufficient for funding the operations, the debts which are unsustainable have been incurred and much more. Therefore, the managers should emphasize on effective corporate governance. During the Covid-19 pandemic, the managers have been updating their board of directors on the changing scenario. They have been taking regard of the stakeholder groups. The consideration of the health and safety of the company’s employees is the ethical responsibility of the company. The investors are also prioritising their responsibility towards their employees and are focusing on corporate governance which is sustainable. There are instances where a company has to prioritise one group of stakeholders over the others (Khatib & Nour, 2021). It could be interest of the customers, the shareholders, the employees the public, etc. The Covid-19 situation demands the focus on the interests of the employees as their health is the top priority. Rules identified on this Corporate Governance assignment where developed during the pandemic and where aimed at improving the stakeholder relationships of the company. In addressing the needs or interests of one party or stakeholders, the interests of others would be subjected to trade-offs which the companies need to handle.
The company has its responsibility towards it stakeholders and must meet their commitments. The company during the pandemic should strictly oversee the performance of the company so that the interests of the non-shareholders are met. As opined by Koutoupiset al (2021), the corporate governance should include the interests of the stakeholders in their strategies and decision making. The Covid-19 pandemic has aggravated the pressure for incorporating the stakeholder opinions and perspectives, especially the employees, into the decision and oversight processes of the company. The corporate governance also expects the company to show how well they are performing and meeting the requirements of all the stakeholders. Though this could seem challenging or create external pressure on the company to be accountable and more responsible towards their stakeholders, the Covid-19 has taught the companies in a hard way that sustainability and corporate governance could generate better outcomes (Deliu, 2020).
The business will find it challenging to run their business amidst the pandemic as this is an unprecedented situation. According to Zattoni & Pugliese (2021), the governments across the world have imposed various restrictions for dealing with Covid-19. These have raised critical challenges with respect to corporate governance. This Corporate Governance assignment also observes that administrators have witnessed a huge change in the pandemic situation. The working arrangement has shifted to remote structure. The administrative tasks should follow the rules of corporate governance. The main driver of the economy is business. Business affects all the economic actors implicitly or explicitly. For an economy to prosper and thrive, the crucial aspects are transparency, accountability, fairness, responsibility of companies on social, legal and economic grounds. Corporate governance safeguards these crucial aspects of a nation’s wellbeing. The corporate governance during Covid-19 pandemic will facilitate achievement of organizational objectives, assure compliance and control the risks. Corporate governance is essential in the times of remote administration and operations as the work is being carried out through virtual platforms. Good and effective corporate governance will ensure good formal communication between the company and its stakeholders. This would increase the effectiveness and efficiency of the company’s management. The business collapses and scams that the world had experienced over the past decades have been escalated by Covid-19 pandemic (Hsu & Liao, 2021). Therefore, the pandemic and subsequent crisis has increased the need for a transparent and sound corporate governance of a company. This Corporate Governance assignment has identified the effect of Covid-19 on corporate governance. It also highlights how organisations have grown highly skewed towards the interest of the employees and does not consider the other stakeholders like shareholders, customers, etc.
It can be concluded that the board of the company is facing huge challenges and complex situations due to the Covid-19 pandemic. The environment during and post pandemic is characterised by demands and pressures from different groups of stakeholders. The pandemic has also increased the expectations for societal engagement of the business. The businesses demand corporate citizenship to cope with the social and economic crisis created by the pandemic. The pandemic has led to uncertainty about the future. The concern for stakeholders and the social responsibility of the organizations is being guided by corporate governance. However, these factors are making the process of decision making complicated for the companies. The email suggests the managers to take corporate governance as their responsibility towards their stakeholders and society at large. The modified rules of corporate governance should not be considered as a burden or external pressure. Covid-19 has increased the need for adopting a stakeholder-centric model of governance. This would guide the boards, managers and business leaders throughout the crisis and in the post crisis period. Following the points identified on this Corporate Governance assignmenta sustainable angle to it would lead to effective and efficient decision making and operations in the post Covid-19 era.
The following recommendations would facilitate improving the corporate governance of the company.
• The managers and the board needs to realise thatgovernance is beyond compliance. Corporate governance should be based on a balanced conformance, i.e., compliance with regulation, legislation and codes of practice with the board’s performance.
• Governance should redirect and guide the company towards improvement of the performance through policy making and strategy formulation.
• The role of the board and managers in strategy making should be clarified.
• Organisational performance needs to be monitored closely.
• The role of the CEO is significant in executing corporate governance effectively as the CEO acts as a link between the role of the management in attaining the corporate goals and the role of the organization in giving a strategic direction to the organization.
• Good corporate governance should have a strong risk management and risk oversight.
• Good governance also enhances internal control.
• The Corporate Governance assignment research proposes directors and the stakeholders should have holistic view of the scenario and complete information
• It is important to maintain a strong governance infrastructure.
Bhagat, S., & Bolton, B. (2019). Corporate governance and firm performance: The sequel. Journal of Corporate Finance, 58, 142-168. Deliu, D. (2020). The Intertwining between Corporate Governance and Knowledge Management in the Time of Covid-19–A Framework. Journal of Emerging Trends in Marketing and Management, 1(1), 93-110.
Gelter, M., & Puaschunder, J. M. (2020). COVID-19 and comparative corporate governance. J. Corp. L., 46, 557.
Hsu, Y. L., & Liao, L. K. C. (2021). Corporate governance and stock performance: The case of COVID-19 crisis. Journal of Accounting and Public Policy, 106920.
Khatib, S. F., & Nour, A. N. I. (2021). The impact of corporate governance on firm performance during the COVID-19 pandemic: evidence from Malaysia. Journal of Asian Finance, Economics and Business, Forthcoming.
Koutoupis, A., Kyriakogkonas, P., Pazarskis, M., & Davidopoulos, L. (2021). Corporate governance and COVID-19: a literature review. Corporate Governance: The International Journal of Business in Society.
Ltifi, M., & Hichri, A. (2021). The effects of corporate governance on the customer’s recommendations: a study of the banking sector at the time of COVID-19. Journal of Knowledge Management.
Zattoni, A., & Pugliese, A. (2021). Corporate Governance Research in the Wake of a Systemic Crisis: Lessons and Opportunities from the COVID 19 Pandemic. Journal of Management Studies.Corporate Governance assignment