Analyzing the Board & Management Structure-Samples for Students

Questions: 1.Provide Information on the Board and Management Structure and Critically Comment on these with regards to Corporate Governance Matters. 2.Critically Comment on the Independence of the Directors of the Company chosen, Independence of the auditors of your chosen Company, Split of Position of Chairman and Chief Executive Officer (CEO) 3.Choose one Corporate Scandal that Occurred in any one of these Countries: USA, Australia, Brazil, India or United Kingdom between 2010 and 2016 and highlight the Corporate Governance Issues regarding the Scandal. Answers: Introduction Organizations are accompanied by complex set of activities in which various functions are performed with a view to achieve certain goals and objectives. It is observed that organization being a separate legal entity operated and owned by different persons. Directors and managers are the key persons who take all the strategic decisions with a view to achieve certain goals and objective. This report has been prepared on the basis of information reflected by Acer group in its annual report. Annual report of Acer group is accompanied by financial and non financial information. Currently, with the increasing ramification of economic changes and complex business conditions, all the strategic decisions in company for its future growth are taken by its 7 appointed directors. This report is divided into several part started with the corporate governance mechanism of company. After that, independence of directors and auditors of Acer group has been taken into consideration. Afterward, differen ces in chairman and chairperson position have been described in determined approach. This report reflects the several financial and non-financial details of Acer group (Acer Group, 2016). Body context Key managerial persons are those individuals who make all the strategic decisions in the organizations such as chief financial officer, directors, managers and other executive directors. In Acer group, all the strategic decisions are taken by the board of directors of Acer group by passing resolution in board meeting (Cohen, Krishnamoorthy Wright, 2017). 1.Corporate governance matter The Board of directors of company held six meeting with in the period of Jan,1, 2015 to May 12, 2016. However, three independent directors named F.C. Tseng, Ji-Ren Lee and Chin-Cheng Wu have attended this meeting in order to evaluate any possible discrepancy and negative business functioning of organizations. As per the corporation act it is given that every organizations should have at least 1/3 independent directors in its board meeting. These independent directors make proper level of assessment in the business functioning of organization and determine whether directors are taking all the decisions in the best interest of organizations. It is observed after evaluating annual report of company that company has been complying with all the laws and regulations with a view to establish proper corporate governance mechanism (Borokhovich, et al. 2014). However, it is observed that Acer group does not have any discrepancies in complying with corporate governance best practice principles for TWSE/GTSM listed companies. It is determined that company has maintained centralized management decision decisions system. All the legal and compliance matter is handled by the legal department of organizations (DeZoort Harrison, 2016). There are several legal representatives of the directors such as Carolyn Yeh who represent Hung Rouan executive directors of company. All the directors of company are inclined towards complying with all the legal rules and regulations. In addition to this, being a listed company has also complied with all the applicable listed rules and regulations. This company has also established proper level of appropriate risk control mechanism according the organizational culture and governing rules and regulations and company governing laws. Acer group has also initiated insider trading rules and regulations on all the directors with a view to prevent the insider trading business functioning of organizations (Claessens Yurtoglu, B. B. (2013). This commit tee assists organizations to comply with the different legal and non legal requirements in determined approach. For instant, audit committee of Acer group will ensure that company has been reflecting true and fair view in its financial statement, remuneration committee of organization will also helps in determining the proper level of remuneration distributions in the value chain activities of organizations (Lee, Lee Nagarajan, 2014). 2.Independence of directors Each and every organization has to hire 1/3rd of total directors as independent directors who do not have any kind of pecuniary relationship with company. These directors are the trustee to shareholders and organizations who works in the best interest of organizations. It is evaluated that there are several independent directors in Acer group such as F.C. Tseng, Ji- Ren Lee and chin-Cheng Wu who are working in the best interest of shareholders. However, it is considered that if Acer group and its board of directors want to pass any resolution in company then they have to take unanimous approval of all the independent directors in the business functioning of organizations (Tricke Tricker, 2015). These directors have no interest in the business functioning since last three years. They are hired as independent person who will evaluate all the business decisions and board decision. However, government on international level has accepted this independency of directors as mandatory requir ement for the better control on the internal business functioning of organizations. The Acer group has managed to hire 3 independent directors to take control of managerial functions. These F.C. Tseng, Ji- Ren Lee and chin-Cheng Wu do not have any past relation with the company and has no pecuniary relation with the business of Acer group. These independent directors will monitor the insider trading activities and other discrepancies with a view to run business effectively. In order to make proper level of compliance with corporation act, company has initiated audit committee, compensation committee, transformation committee and Assets Management committee in organizations. These committees will be comprised on at least 1 independent director for the proper level of surveillance. These F.C. Tseng, Ji- Ren Lee and chin-Cheng Wu do not have any do not have any relation with the affiliated company and do not have any single shares of company. They also do not have any martial relation with other directors of company and do no indulge in second degree of kinship with any other director of company. They also do have any shares and business partitions in any financial institutions and banks. Therefore, as per the remark given by auditors of company and details given in the annual report of company it is revealed that these three directors are independent and do not have any pecuniary relation with the company. Independence of auditors Auditors are the persons who check the financial statement and annual report of company and qualify the report in determined approach. It is evaluated that auditors of Acer group are indulged in evaluation, improvement and planning of Acers internal business operations with a view to increase its true and faire view of its financial positions. Internal auditor of Acer group both regular and ad hoc reviews of risk management control procedure and result provided by these auditors are taken into account by the board of directors of company (Soh Martinov-Bennie,2015). Auditor of Acer group is KPMG which is certified public accountant firm who audit the reports and financial statement of company. There are two auditors Huei-Chen change and Agnes Yang who audit the financial report of organizations. It is determined that these auditors are independent auditors and do not have any financial and non financial relation with the business functioning of Acer group. KPMG is accompanied with va rious certified public accountants who are indulged in auditing financial reports of different companies. Company has two independent auditors Huei-Chen change and Agnes Yang who audit the financial report of organizations and passed unreserved disclaimer on the financial report of organizations (Hui, Matsunaga, 2014). In addition to this, these auditors do not have any financial and non financial benefits from the company. Auditors of Acer group are the trustee for the stakeholders and they have to work in the best interest of the organization at large. Acer engaged KPMG to perform independent limited assurance in accordance with International financial reporting standards and ISAE3000 on this report of which company has applied GRI G4 core option. In addition to this, KPMG has also audited the financial statement and annual report of parent company of Acer group and issued modified qualified and unqualified opinion on the same. (Acer Group, 2016) These auditors have conducted audit in accordance with the regulations governing auditing and certification of financial statements by the certified public accountants an auditing standard. In addition to this, all the consolidated financial statement of all the parents and subsidiaries company of Acer group has been audited by the certified public accountants of KPMG. Therefore, by evaluating the annual report of company, it has been considered that Acer group has hired independent auditor for auditing the financial report of company. However, KPMG has also audited financial statement of its parent company but it has not affected its independency while auditing the financial report of Acer group (Needles Crosson, 2007). Split of position of chairperson and chief executive officer. After evaluating the financial and non financial details of company, it is considered that George Huang is the chairman of company who is making all the imperative decision for the Acer group (Cornforth Macmillan, 2014). It is person who will help in convening the board meeting for passing board resolution in organizations. The chairman is the person who would be selected by the board of directors by their unanimous consent. He will be responsible in discussing the matter with the directors, counting vote and also will give his consent on the particular topic which has got tie due to same number of negative and positive votes on the subject matter. He will be the sole persons who will hear all matters of directors of company (Quigley Hambrick, 2015). His major role is to conduct the board meeting and host it to till the completion of that meeting. However, chief executive officer is the person who will make all the internal and external business decisions. All the employee of Acer group will be directly accustomed to act as per the instructions and directions given by chief executive officer. In the Acer group, J.T. wang assumed the position of chairman and chief executive officer, while Glanfranco stepped into the role of president of Acer incorporation (Menz Scheef, 2014). Therefore, it could be inferred that both the position are very important for smooth running of business. CEO of company will take care of all the internal and external business functioning while on the other hand chairperson helps directors to take their strategic decision making with a view to create shield against external environment changes. There are several other differences between CEO and Chairman such as position, power and work features. However, CEO is considered at superior position than chairman. Chairman helps in conducting the meetings and passing resolution in general and board meeting while, chief financial officer takes all the managerial and business decision for the betterment of organizations. However, all the business department of Acer group such as regional operations, New Core Biz, New value creation Biz and supporting functions will be accustomed to act as per the instructions and directions of chief executive officer of company. As per the corporation act and listed rules and regulation, it is considered that chief executive officer of company need not to be independent persons but a chairperson or chairman should be independent director who do not have any kind of pecuniary benefits from the organization (Brigham Ehrhardt, 2016). 3.Corporate scandal The study has been prepared to show the corporate scam which took place in India. After several corporate scandals, Sahara was one of the major corporate scam. In this scam Security Exchange Board of India failed to detect or put penalties on the companys wrong practices due to the political pressure. Sahara failed to refund all the money to its investors and due to which SEBI had to impose penalties on it. However, due to high political pressure SEBI failed to impose penalty on it. With the increasing illegal business practice of Sahara and ramified changes in the business functioning of Sahara promoters of the company Subrata Roy had to come up with non ethical and illegal business practice to save the company from the penalties (Khandelwal, 2017) Conclusion This report reflects core aspects of Acer group in determined approach. The main consideration in report is made on the details given in the annual report of company. It is considered that each and every organization should have at least 1/3rd independent directors who could act as trustee for the stakeholders in organizations. Acer group has complied with all the applicable rules and regulations in determined approach. It has maintained effective level of corporate governance mechanism. In addition to this, chairman should also indulge in managing the board meeting while; on the other hand, chief executive officer should make all the imperative business decisions for the organizations. 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