Corporate governance within an expanding small business
Option 1. Conduct a review of the governance of your organisation (or one with which you are familiar) in the form of a report to the Chairman (or President) of the Governing Board of Directors. In the brief report use the concepts, tools and techniques learned in this subject to review the structure, process and effectiveness of the governance of the organisation and to make recommendations for appropriate improvements.
The report should include:
A) An outline of, and brief discussion of the importance of, the bases or criteria for the review of the organisation’s governance (e.g., refer to which standards or ...view middle of the document...
Within this report to the Managing Director I will evaluate the relevant governance theories and principles to the business and look for the key aspects that should be considered in a governance strategy and review appropriate ways to balance the need for a governance strategy that can be implemented by the XXX XXX Victoria without an undue cost burden to the company.
Basis for the review of XXX XXX governance
‘Governance encompasses the management of organizational processes and information to support decision-making and to provide controls that ensure decisions are carried out appropriately’ (Lamont, J 2011). Many of the governance policies, principles and practices published and required by law for listing on a stock exchange, such as the American Sarbanes-Oxley Act of 2012, the ASXCGC and the UK Combined Code 1998 are written with publically listed companies and the welfare and protection of the share buying public in mind (Tricker, B 2012, p275). However the potential internal benefits to a solid governance strategy alongside the recent trend for some contracts requiring documented evidence of a governance strategy as a prerequisite for tender proposals, such as the recently awarded Origin Energy national XXX services tender contract ‘Origin Energy Limited Request for Proposal For: XXX and VC Support February 2014 V1.0’ (Biffin L, 2014) is forcing the need for the adoption of a formalised governance strategy and governance policy upon the business. There are also published governance policies for privately held companies such as the ‘Corporate Governance Guidance and Principles for Unlisted Companies in the UK’ and I will evaluate this in more detail.
In essence corporate governance is becoming a very real compliance issue for XXX XXX to compete for the large service contracts the company wishes to purse. Furthermore planning and assessing the activities of the business within a governance framework will allow for the review of conformance and performance based outcomes to be separately measured, analysed and verified, this is not the case currently with department heads hXXXing a major focus upon performance rather than conformance.
Currently governance issues such as strategy formulation, accountability and policy making are discussed, documented and reviewed by the senior management team comprising of the Managing Director, General Manager, Operations Manager and to a lesser extent department heads. They are the board members, making it an all executive board, with no independent non-executive influence. External ratification is limited to an external accountant verifying the company’s financial statements for the purposes of supplying certified financial statements to new suppliers for lines of credit or as required for tender bid submissions, and peer reviews of national publication documentation such as environmental policies by the other interstate branch owners. The overriding theme amongst corporate governance policies and...