Professional Documents
Culture Documents
A001532358
Student name:
Course name:
Subject name:
Corporate Governance
Subject facilitator:
Teaching Centre:
Oxford College
No. of pages:
16 Pages
Word count:
I, the above named student, confirm that by submitting, or causing the attached assignment to
be submitted, to AIB, I have not plagiarised any other persons work in this assignment and
except where appropriately acknowledged, this assignment is my own work, has been expressed
in my own words, and has not previously been submitted for assessment.
ASSESSMENT SHEET
(to be completed by the examiner)
Student name:
Course name:
Subject name:
Assessor/marker:
COMMENTS
Principles learnt (for example, number and understanding of principles referred to, their influence on the structure of this paper,
number and correct citations of references, use of appropriate jargon)
/4
Application of principles. That is, the analysis and evaluation of the example problem based on the
principles, including the final recommendations and their justification
/8
How well the example problem was described, including the extent and depth of information
(including the data) about it that was accessed
/4
/2
/2
Total
Less penalties
GRAND TOTAL
/20
General comments
/20
I disagree with the assessors assessment and the new mark is as follows for
the following reasons:
Moderator:
CORPORATE GOVERNANCE
ASSIGNMENT
Table of Contents
1. Executive summery ................................................................................................................................... 6
2. Introduction of the organization. ............................................................................................................ 7
2.1 Organization Structure. .................................................................................................................. 7
2.2 Size of the organization. ................................................................................................................. 8
2.3 Market share by percentage ......................................................................................................... 8
3 Importance of corporate governance ........................................................................................................ 9
3.1 Key Problems in Corporate governance today. ............................................................................... 9
3.2 Integrated Vision ............................................................................................................................. 9
3.3 Pillars of good governance ............................................................................................................. 9
4. Corporate Governance Best Practices in private companies. ................................................................ 10
5. Debug Current Governance issues. ........................................................................................................ 12
6. Proposed new organization structure. .................................................................................................. 13
6.1 Marketing SBUs ........................................................................................................................... 13
7. Conclusion .............................................................................................................................................. 14
1. Executive summery
This report provides an analysis of a current corporate governance structure and the issues
faced at Debug group of companies (pvt) ltd and recommendation to overcome it.
Debug group of companies (pvt) ltd. (hereafter Debug group of companies would be known as
Debug) is a one of the leading ICT providers in Sri Lanka today. The group was founded in 1989
at a time of great development in the IT sector. Growing from strength to strength gaining a
reputation as a provider committed to high standards of service. Debug has diversified the
business into several areas such as power and renewable energy solutions, printing advertising
as well as automotive services (Debug.lk, 2015).
As a current employee of Debug, I have applied personal expertise, knowledge, know how along
with 10 years of experience within the organization in order to support, illustrate and to extract
examples which are relevant to the subject & its content.
This report will document and will state in-depth knowledge of the corporate governance issues
related to Debug and to the power and renewable energy marketing SBU products as well as
other products within the organization that needs to be addressed. And will explain specific
issues with details of its functions within.
Using concepts for improving the delivery and other problematic processes, and details of
changes required to rectify the problem or to improve the situation providing brief
recommendations.
With approximately 500 + personnel and over 3,000,000 units from a range of 47,000 products
being sold. With 14 island wide branch network. Debug is one of the Leading ICT companies in
Sri Lanka, with ISO 9001 (2008 version) certification , the power solutions arm of Debug has an
average market share of 23 % and won the best distributor award for UPS systems in south east
Asia baring India for the past two consecutive years from Schneider electric (Source: Debug profile 2014).
The above structure illustrates the fact that all decision making is been taken by the managing
director and in this structure the board of directors are just overlooking the business aspects of
their delegated SBUs.
Adopt a formal corporate governance framework outlining the roles of key bodies such as
partners, shareholders, Board of Directors and the management.
Establish a timely, open and transparent flow of information with share holders.
Endeavor to set up a formal board of directors to accompany the growth of the company.
Develop a clear mandate for its board of directors to oversee the operational performance
of the business as well as evaluating and improving business strategies.
Maintain credible books of accounts which are annually audited by external auditor.
Set up a internal control framework in place and conduct a regular review of risk.
Formulate a frame work setting out the families relationship with the business.
(Mahajan, 2015).
Since many business decisions play out between board meetings, a key to successful private
company corporate governance is good communication between the CEO and directors
outside the boardroom. This is especially true when regularly scheduled board meetings
occur less frequently. Without such communication, board meetings too often can turn into
reporting sessions consumed by updates, with too little time devoted to important strategic
considerations and decision-making.
There is no one means to effectuate good communications outside the boardroom
between the CEO and directors. Communications may occur informally through one-on-one
communications with directors or regularly scheduled, but unofficial, group telephone calls
and/or written reports to directors. Whatever means are adopted, companies need to be
careful to not overburden the CEO and his or her management team with unnecessary
reporting duties or to encroach on the CEOs day-to-day management responsibilities.
An important role of an independent director on the board of a private company is to fill
the existing boards knowledge and experience gaps, perhaps bringing to the board an
independent directors industry knowledge and experience or special subject matter
knowledge, e.g., technology or marketing expertise, separate from specific industry
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experience.
Independent directors can be valuable to family-run companies or companies with
multiple founders. Outside trusted directors can help mediate conflict and introduce a
measure of neutrality to a companys decision-making.
Traditional networking and word-of-mouth hiring are not always effective at identifying
the best director candidates. Management should be prepared to think imaginatively
beyond old boy networks, including possibly engaging a search firm, to better access a
broader pool of talented, and more diverse, director candidates.
Good chemistry among the board and CEO is crucial for the companys long-term
success. While achieving a good blend of perspectives on a board is important, maintaining
a level of trust and cohesion among a group of people with different backgrounds and
different interests cannot be overlooked. This takes ongoing effort to accomplish.
The relationship between a board and a CEO can be a sensitive one. Building strong
relationships before problems arise is key to weathering possible future storms. A board
should work to create and maintain a collaborative, high trust relationship with the CEO.
While responsible for overseeing management, the board needs to empower the CEO
manage the company and his or her team and avoid intrusion into CEO duties. In difficult
times, especially when the CEO is failing, the board may need to increase its involvement,
including, if necessary, removal and replacement of the CEO. In those circumstances, failure
to have built and maintained strong relationships between the board and CEO will make the
boards involvement during difficult times only more problematic.
Venture capitalists (VCs) invest in people as much as they invest in ideas. Coming in and
immediately removing existing leadership of an early-stage company is very seldom a sound
plan. Rather, if possible, VCs should embrace an atmosphere of collaboration. If leadership
issues arise, VCs may consider electing a chairman of the board of directors to guide the
CEO, not threaten to replace him or her. Building a track record of working with
management can go a long way toward putting a company in position for success.
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Venture capitalists occupy board seats of early-stage companies for reasons mostly
aligned with the goals of the companys founders. More often than not, when VCs take
positions on the boards of companies in which they invest,they do so because they honestly
believe that they can help the company navigate the choppy waters of early-stage
development. As investors, VCs want to protect the company against risk, not unlike the
companys founders. While independent directors can bring unique perspectives to the
boardroom, VCs can also be effective directors because they have devoted significant time,
money and effort into knowing the business and have a stake in its success.
Strategy is paramount. If board meetings are not effective for discussing strategy for any
reason, board committees are capable substitutes. Appointing board committees charged
with specific tasks, like audit, compensation or risk management, can help the board stay
on track and ensure that important issues are afforded the necessary time and
consideration.
(Foley.com, 2015)
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In the above structure the MDs involvement would be minimal and would only be used for key
strategic decisions and implementations of new strategies. The board of directors and the
management would be making day to day decision making.
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7. Conclusion
Overall corporate governance of the organization needs to change in order for the company to
shift the more Conservative way of thinking into a collective and more collaborative approach to
drive the organization towards a single vision.
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8 References
Mahajan, K. (2015). Analysis of Nine Pillars of Corporate Governance Principles for Small.
[online] Slideshare.net. Available at: http://www.slideshare.net/KaranMahajan7/analysis-ofnine-pillars-of-corporate-governance-principles-for-small-and-medium-enterprises-smes-indubai [Accessed 7 Dec. 2015].
YouTube, (2015). The importance of corporate governance. [online] Available at:
https://www.youtube.com/watch?v=bEKumcUERtE [Accessed 7 Dec. 2015].
Foley.com, (2015). Home. [online] Available at: http://bboland@foley.com [Accessed 7 Dec.
2015].
Debug.lk, (2015). [online] Available at:
http://www.debug.lk/home.php?topic=e9013cbf1e459122a334df0cf160e178 [Accessed 16 Sep.
2015].
Sri Lanka customs, imports Statistics,Annual report 2014,
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