Module 4

Corporate Management; Corporate Policy, Corporate

Governance, Top Management, Code and Laws of
Corporate Management, Corporate Scenarios and
Strategy; Strategies for Stable and Dynamic markets,
StrategiesforGlobalMarkets.

Corporate governance
A system by which companies are directed and controlled.
Determines who the organization is their is to serve and how the
priorities and purposes of the organization are finalized.
Definition
Corporate governance is the application of best management
practices, compliance of law in true letter and spirit and adherence to
ethical standards for effective management and distribution of wealth
and discharge of social responsibility for standard development of all
stake holders

Elements of good corporate governance

Role and power of the board of directors
Board appointments
Board independence
Board induction and training
Board resources
Board skills
Legislation
Management environment

Elements of good corporate governance

Code of conduct
Strategy setting
Financial and operations reporting
Monitoring board performance
Audit committee
Risk management

Principles of Corporate governance

Ensuring the basis for an effective corporate governance frame work
The rights of share holders and key ownership functions
The role of stake holders
Equitable treatment of share holders
Disclosure and transparency
Responsibilities of the board

Rights of share holders

Right to participate in decisions concerning fundamental corporate
changes
Voting rights
Equitable treatment
Share holders of the same class should be treated equally
Insider tracking should be prohibited

Role of stake holder

Stake holders should have access to relevant information in the
corporate governance process
Assuring that the rights of stake holders are protected by law
Permit performance enhancing mechanism for stake holder
participation

Disclosure and Transparency

Information should be prepared in accordance with high accounting
standards
Annual audit should be conducted by an independent auditor
Scope of material information to be disclosed

Responsibilities of the board

Board members should act on the best interest of the company with
due diligence and care
The board should treat all share holders fairly
The board should ensure compliance of law
Define key functions of the board
The board should exercise objective judgment independent from
management.

Benefits of corporate governance

Efficient management of the organization ensuring transparency,
accountability and integrity of management
Protection of the rights and interest of share holders maximizing long
term share holder value
Proper balance between different stake holders and interest of society
Proper direction for the long term development of the organization

Benefits of corporate governance

Trust and goodwill of share holders and stake holders
Good will of the consumers and public
Better relationship and terms with suppliers and marketing
intermediaries
Properly govern companies are in a better position to attract foreign
capital, technical collaboration and business

Determinants of corporate governance

External determinants
Government regulations
Codes of law and corporate governance
Associations like CII
International development in the field of corporate governance

Internal determinants
Board of directors
Management
Share holders

Important aspects of corporate governance

Adequate disclosures and effective decision making to achieve
corporate objectives
Transparency in business transactions
Statutory and legal compliances
Protection of share holder interest
Accountability of managers and the board of directors
Commitment to values and ethical conduct business

Corporate governance and Strategic management

1. Corporate governance and strategic intent
2. Corporate governance and strategic formulation
3. Corporate governance and strategy implementation
4. Corporate governance and strategy evaluation

Corporate governance and Strategic management

1. Corporate governance and strategic intent: The strategic
intent of an organization deals with vision, mission, goals and
objectives. Corporate governance plays a vital role in these
aspects.
2. Corporate governance and strategic formulation: Deciding
on the specific corporate and business strategies for an
organization as the responsibility of top management and they
are guided in this by the board of directors

Corporate governance and Strategic management

3. Corporate governance and strategy implementation:
Strategy implementation is the responsibility of the managers
of the organization with the board of directors and
organisations; top management having little say.
However , the corporate management should put in place
mechanisms that can ensure proper implementation of strategy
by the managers

Corporate governance and Strategic management

4. Corporate governance & Strategy evaluation
Corporate mechanisms like reporting the annual
performance of the organization help the share holders to
evaluate whether the organization is on the right path. The
board of directors provide continual guidelines as well as
monitoring of the performance and the behavior of the
organization.

Board of director and strategic management

Role
1. Determining the companies purpose and ethics
2. Deciding and defining the strategy
3. Planning
4. Monitoring and controlling the CEO
5. Reporting and making recommendations to the share holders

Strategic leadership
Who are the strategic leader:
1. At the corporate level : CEO , Senior executives, Corporate Staff
2. At the business level : SBU heads
3. At the functional level : Managers at different functional level
4. At the operational level : Manager responsible for implementation
may be from deputy manager through assistant manager through
senior super visor

Task of strategic leader

1. Determining the strategic direction
2. Effectively managing organizational resources portfolio
3. Sustaining and effective organization culture
4. Emphasizing ethical practices
5. Establishing balanced organisation cotrols

Corporate Restructuring
Organizational change to create a more efficient or profitable enterprise.
It has got 3 dimensions
1. Organizational restructuring
2. Business level restructuring
3. Financial restructuring

Corporate parenting
Manner in which, the corporate head quarters or the corporate center
managers and nurshers individual business or SBUs
Providing expertise and services
Making investable funds available
Mitigating risk