Introduction The issue of corporate governance failure dominated business debates since the last decade. And it seems to be going nowhere. For example, it continued to surface within UK Banks- a worrying trend for the British economy. Unlike other businesses, corporate governance of banks is expected to deliver positive results to the wider range of stakeholders- shareholders, depositors, creditors, and regulatory bodies etc, (Spong, K, R, and Sullivan, R, J. 2007). In contrary, many of the UK banks such as the Co-operative, RBS and Barclays, have had weakness in how these corporates are managed. This course work aims at examining issues corporate governance failure at the Royal Bank of Scotland (RBS). It also tries to establish the relationship between corporate governance effectiveness and profitability within UK banks. A very recent issue within this area is also including towards the end of the course work. Why corporate governance Empirical evidences show that good corporate governance promotes effective monitoring of corporate assets; effective risk management and greater transparency. It also helps to achieve and maintain public trust and confidence in how companies are run. I.e. it is a means to keeping companies profitable. A study by Epstein et al., (2012) highlighted that from either an internal long-term profitability or external shareholder perspective, there is an indication that good board governance add value to an organisation. In contrast, poor corporate governance may contribute to company /business failure, which could, in turn, causes a company into liquidity crisis leading them to insolvency or total collapse. What is Corporate Governance? The Organisation for Economic Cooperation and Development (... ... middle of paper ... ...porate governance can affect corporate performance. A board filled with an atmosphere of change and readiness to learn from past mistakes and a sound risk management system would enhance financial value of banks. Yet, no single model of good corporate governance fits all companies. There are some principles initiated by the OECD, the Basel committee on banking supervision, the Walker report, and others. These principles cover the following areas: rights of shareholders; equitable treatment of shareholders; the role of stakeholders; disclosure and transparency; and responsibilities of the board. Moreover, the World Bank has proposed guidelines for good corporate governance in the financial sector. All of these should inform how well a company preforms and result are reported to its stakeholders. http://www.federalreserve.gov/newsevents/press/bcreg/20140326a.htm
During the late nineteenth century, the court and the constitution blatantly favored large corporations. They did this through the interpretation of the United States Constitution, particularly the Fourteenth Amendment, as it pertained to corporations. This led to the decision regarding the Wabash vs. Illinois case and in turn to the creation of Interstate Commerce Commission.
Capitalism has never been dead and will be here for at least the next century. In a world where the market is filled with imperfections, it is in order for the government to interfere to restore order in the market. Increased concerns over the 2008 market collapse prompted the government’s to take charge of their responsibility and act. Capitalism is a system of government that favours individual growth with minimal government interference. The opposite of capitalism is communism, where the property owner is the state, and the main aim is social welfare enhancement. A mixed economy embraces the two and balances between the extremes. Many countries across the globe have adopted a mixed economy as it reduces the losses suffered by the countries that practice the extremes. Capitalism has been known to be responsible for growth of economies among them, the United States, Britain, and other developed countries. In this essay, we shall examine the future and nature of capitalism in the light of a mote communist future.
This report gives the brief overview of the concept of corporate governance, its evolution and its significance in the corporate sector. The report highlights various key issues and concerns that are faced by the organizations while effectively implementing and promoting Corporate Governance.
Bibliography: Turnbull, S. (1997). Corporate governance: its scope, concerns and theories. Corporate Governance: An International Review, 5 (4), pp. 180--205.
The end of 2001 and the start of 2002 saw the end of a period of magnified share prices and booming businesses. All speculations of misrepresentation came to light and those firms which once seem unconquerable were now filing for bankruptcy. Within this essay, I shall discuss the corporate governance mechanisms and failures which led to the Enron scandal resulting in global corporate governance reforms being encouraged.
Organizations that only have top management as the board members are more susceptible to accounting malpractices. Members of the board should preferably own shares in the company to ensure diligence when it comes to the interests of the company. Apart from the Board of Governors, there should also be an audit committee in place to oversee the financial dealings of the bank. Members of the board and the audit committee should have basic financial knowledge. Some of the members should also be experts in finances so that they can detect any anomaly that may take place in terms of financial reporting. An overhaul of the regulatory framework is required to empower authorities to intervene immediately, and make improvements. New technology is required. Manual antiquated processes should be eliminated because this causes greater human error and poor
Managerial accounting has changed over the years. Managerial accounting focuses on more than the financial aspect. We will be looking at how managerial accounting affects the business world today. Business also look to the economy, federal taxes, and the financial market so it can make the best decisions for their business.
The Asian Financial Crisis which exposed the corporate governance weaknesses was a wake-up call for all the policymakers, standard setters as well as the companies (OECD, 2014). The parties that involved and affected from the crisis started to realize the importance of having strong corporate governance practices in their countries. Consequently, the Asian economies along with the OECD established the Asian Roundtable on Corporate Governance in 1999, in order to support the enhancement of corporate governance rules and practices (OECD, 2014).
Nottingham Trent University. (2013). Lecture 1 - An Introduction to Corporate Governance. Available: https://now.ntu.ac.uk/d2l/le/content/248250/viewContent/1053845/View. Last accessed 16th Dec 2013.
K, . N., ER, w., DAVID, K., PAUL, M., WALTER, O., & EVANS, A. (2012). Corporate governance theories and their application to boards of directors: A critical literature review . Prime Journal of Business Administration and Management (BAM), 2(12)(2251-1261), 782-787.
1. Corporate Law for Ontario Business (2012). Farah Jamal Karmali 2. Business Dictionary (2010). http://www.businessdictionary.com/definition/separate-legal-entity.html
Today in the present world, most countries have the core object of governance in the “public good provisioning ” leitmotif. According to the main principles ; accountability, participation and transparency, from the governance ecology interaction between the State, Civil Society and Market –place, within the global-village environment, (Higgot and Ougaard 2002; Stiglitz 2003; Woods 2006) “Governance Deteriorate the Economical Progress of the Developing Countries”(Box 15.4 Kaufmann, Kray, and Mastruzzi, 2008 p 291 Governance Matter Vll: some leading findings). In my opinion governance on itself without parametric recognition is doomed to fail, instead of reflecting to new mechanisms of responsibility to steer and guide the social and economical issues, which I will try to clarify in the upcoming body breakdown. Governance is supported as structure through institutions, as process through instruments and as agenda through elements of good governance, generating the capacity to improve significant development and positive impact of economic growth and to cut back destitution. Despite of the fact that developing countries can come in line with the quality of governance by accepting it as a crucial determinant of developmental performance, it didn’t came into effect. The underlying fact of weak and poor governance was identified as a result, for not effectuating the measureme...
Accounting aids the government and organisations in decision making for their financial stability. This numerical data helps solve real life problems and contributes to how the economy and businesses perform.
The office of the Director of Corporate Enforcement (ODCE, 2015), Ireland defines Corporate Governance as “the system, principles and process by which organisations are directed and controlled. The principles underlying corporate governance are based on conducting the business with integrity and fairness, being transparent with regard to all transactions, making all the necessary disclosures and decisions and complying with all the laws of the land”. It is the system for protecting and advancing the shareholder’s interest by setting strategic direction for the firm and achieving them by electing and monitoring the capable management (Solomon, 2010). It is the process of protecting the stakes of various parties that have their interest attached with a company (Fernando, 2009). Corporate governance is the procedure through which the management of the company is achieving the goals of various stake holders (Becht, Macro, Patrick and Alisa,
1. This report seeks to prepare an explanation of what is meant by responsible business. It will be focused on a responsible business topic and also the nature and the importance of it will be discussed as well. The first responsibility of a business is how to gain and increase its profits. This is essential for a business in order to be healthy. So this report will show and explain what a Responsible Business is really in nowadays and how they operate under some circumstances. Then will follow an explanation and evaluation of the role of the government as an influence on responsible business behaviour. After that it continues with a review and evaluation of influences of ethical businesses approaching to responsible business.