Satisfactory Essays
Nowadays, everyone is talking about corporate social responsibilities and corporate governance not only in terms of business ethics but also as the heart and soul of a corporation. According to the Economic time, (2009) “Corporate governance refers to the set of systems, principles and processes by which a company is governed.” All these illustrates how the company should be managed and controlled in order to perform better on the market and accomplish its short and long-term goals and objective.
All business organization has two things in common: owner and CEO. The owner of a business organization is the person who has all the rights though the organization. He/she can fire and hire the employees, executives and CEOs. I agree with William Pounds statement that the owner is the person who owns and controls assets and the CEO is the one who use these assets in behalf of the organization and its value creation. (TepperCMU, 2009)
Figure 1 illustrates one of the most common governance structures among organizations. Basically, the shareholders are those who vote for the board of directors who are obligated to look after shareholders’ interests. The board hires and fires the CEO who can hire and manage the executives and employees. The executive managers are also allowed to hire and manage employees and to look out for their actions. Looking at the chart, I would say that there is a gap between shareholder, board of directors and workers, which can bring the profit down. So that we can say that, the CEO is the main figure who has to stay between the board and employees and take care of the good image and cash flow of the organization. In one of his publications, Chris MacDonald, an educator, speaker, and consultant in the realm o...

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...e traditional governance responsibilities, finance and strategies of an organization. As Lavy states at first, the board should focus on what the company needs and then to keep the things simple. (Santa Clara University, 2012) For instance, it is now what the board likes to do but it is all about what must be done in favor of the company’s health. Also, they need to keep the meeting pretty straight forward and engage people into the point.
The board of directors should be very careful when they give instruction the CEO. To many bosses and opinions can affect CEO’s actions and make him/her acts irresponsible. Like Levy, I would say that it is helpful for the board to decide who will be the person who will give instructions to the CEO. In that way, the CEO will be manage by only one person who can be his mentor, advisor and the only person who will look after him.
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