UofP - MBA560 - DQs - Week Four - 06-26-06

UofP - MBA560 - DQs - Week Four - 06-26-06 - Week Four...

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Week Four Objectives Explain corporate governance mechanisms. Identify the role of stakeholders in the corporate governance process. Describe the provisions of Sarbanes-Oxley. Describe how the FASB, the SEC, and the PCAOB contributed to Sarbanes-Oxley. DQ 1 Week 4 Why is corporate governance important? Many large companies (like Microsoft) understand that strong corporate governance is a fundamental component of business success. Taking into account the interest of shareholders and other stakeholders—such as employees, customers, partners, suppliers, and communities— is an important component of achieving shareholders’ long-term interests. Furthermore, corporate governance must serve the following purposes: Appropriately distribute rights and responsibilities among Board members, managers, and shareholders in order to establish and preserve management accountability to owners (shareholders). Provide a structure through which objectives are set and attained, and performance monitored (Brealey, 2005). Strengthen and safeguard culture of business integrity and responsible business practices. Encourage the efficient use of resources and require accountability for stewardship of those resources. Lastly, corporate governance should include corporate citizenship issues, which includes monitoring compliance. Hence, changes to corporate governance guidelines/policies should be reviewed for relevance and issues related to matters of corporate responsibility, including public issues of significance to the company and its stakeholders. Robert (Robb) Sikes 520.245.0662 rsikes3@cox.net
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DQ2 Week 4 Who should have a role in an organization’s corporate governance process? The Board of Directors should have a role in an organization’s corporate governance process. Furthermore, several committees should be in place or set up and led by one of the non- management directors. These non-management directors should be responsible for review and oversight of company activities in their areas. Supporting corporate governance, the following committees are examples of those set up by corporations: Audit Committee Compensation Committee Finance Committee Governance and Nominating Committee Antitrust Compliance Committee From further research, I discovered that the Corporate Governance Guidelines for Microsoft were modified to ensure compliance with corporate governance requirements contained in both the NASDAQ Stock Market and New York Stock Exchange listing standards and to enhance corporate governance policies, including creating the role of lead independent director. Furthermore, their Board voted to expand the responsibilities of the Governance and Nominating Committee to include corporate citizenship issues. As a result of that change, the committee’s responsibilities now include monitoring compliance with and recommending changes to the Corporate Governance Guidelines and reviewing the policies and programs that relate to matters
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UofP - MBA560 - DQs - Week Four - 06-26-06 - Week Four...

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