Contemporary corporate governance issues Essay Example | Topics and Well Written Essays - 1500 words

Contemporary corporate governance issues - Essay Example This paper evaluates whether businesses exist solely for the benefit of its owners (shareholders or not). It goes further to look at the agency theory and other related matters as well as the challenges related to it and the need for alternative views and systems in businesses in the present era. Some decades ago, businesses were basically set up to generate wealth for the owners. This was a capitalist model that ensured that investors got the highest possible returns from their investments. Other concerns were kept to the barest minimum. Parkinson (1994) rightly judged by the events around him, that the â€Å"process of supervision and control [management] intended to ensure that the company’s management acts in accordance with the interest of its shareholders [owners]† Twenty years ago, this was a very acceptable standpoint that most people in society would seldom argue against. Wood & Welker (2011) identify a group of shareholders who arose in the 1970s with the view of ‘disciplining’ directors and restoring control of the true ownership of the organization to its owners. This group of people is described by Johnson, Scholes & Whittingon (2008) as pristine capitalists. With this background, there were two major questions: What should a firm do for its connected parties like its workers and suppliers. Are they just a means (in the absence of machinery) for the creation of wealth for these pristine capitalists? Secondly, if all directors were controlled solely by shareholders, what happens to their freewill and what can they do about the needs of other legitimate people connected to the organization in question. So with this, there were a lot of debates and scandals that forced the business community to take the agency theory a step further and incorporate other important and legitimate needs that organizations needed to honor to the larger society and to its connected parties. Need for The Agency Theory The popular Salomon V Salomon case laid the precedence for the separation of ownership and businesses. This has given right to the formation of limited liability companies around the globe that are distinct from their owners. However, to ensure that an entity acts and operates effectively and efficiently, there is the need for organization to employ directors and managers who will manage the supervisory and routine activities of a business respectively. This has led to the need for shareholders and owners to stand aside and transfer the running of their organizations to competent people who can run the organization. These people, often known as directors or managers act as agents of the owners and they need to seek the best for the organization. In doing this, the owners of organizations have to follow the agency theory which ensures: 1. Identification of legal provisions of the contract between the owning companies and joint ventures in line with the rules of the agency theory (which will be discussed later). 2. Accountability to owners (Hutzschenreuther, 2009). Thus national laws as well as articles of associations for the incorporation of the business guards the conduct of managers and directors. This is because these directors, known in Latin as fiduca (which means ‘trust’) and carries connotations of trust, good faith and honesty (Rahaim, 2005). This means that directors and managers need to avoid â€Å"self dealing† or â€Å"conflict of interest†. The idea of self-dealing refers to a situation where directors use their influence or knowledge in an organization to further their needs.

Academic Redshirting by Judy Mollard Article Example | Topics and Well Written Essays - 500 words

Academic Redshirting by Judy Mollard - Article Example In addition, another key strength of the article is that it has probably identified the key issues that are emerging or have emerged from each trend. In my opinion, one key weakness of the article is its failure to include the most recent studies on the subjects discussed. In redshirting, for example, some of the articles that can be included are those written in 2007, 2008, and 2009. It is possible that there were also studies conducted in 2010 and 2011. Unfortunately, Molland’s article covered only an article done on academic redshirting in 2002. A second key weakness of the article is its use of anecdotal evidence instead of scholarly studies for assertions. Finally, another key weakness of the article is that it did not summarize the overall implications of the key trends on education in the United States. Yet, at the same time, it is possible that it was never really the article’s intention to identify the overall implications of the key trends in US education. The possible applications of the article are numerous. First, on the phenomenon of redshirting, it presents one important challenge that teachers are facing: teaching classes where the age gap among pupils in a class can be as high as 16 months and where some of the children can be bored with the instructions. The trend for student-led conferences to explain their own learning is also another area for possible application. Student-led conferences were presented by the article as a possible method for identifying one’s strengths and weaknesses in the delivery of instructions. Of course, studies may be needed to find out how useful or reliable the student-led conferences are but nevertheless student-led conferences can remain an option for teachers until proven ineffective or unreliable. The trend of bringing middle schools into K-8 schools presents an option for educators to follow. The article pointed out that K-8 schools tend to have more parent involvement and fewer discipline problems