Essay Sample on Corporate Governance: Global Issues in the Renault New Boss

Introduction

Corporate governance is a very crucial area of concern in the modern industrial world in light of the world being a global village. Proper corporate governance helps a board of management and all other stakeholders of businesses to ensure they embrace policies that optimize the achievement of their goals (Clarke, T. 2007). The article "Renault New Boss", presents several arguments that reveal some of the corporate governance issues encountered in the global world. First, for the sake of accountability and transparency, there should be no restrictions on where to get people who take managerial roles from as long as the skills and qualities desired to achieve the set objectives, are possessed. Sometimes, stakeholders in decision making are forced to go the extra mile beyond the norm or what people expect of them, what might be perceived as a 'by default' situation to get the right people for the job. It is evident in the article by hiring a person from outside the alliance, Luca de Meo, to take up a lead role with anticipation of change as a result of the new leadership in place.

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Secondly, reshuffles in leadership roles are very crucial. They contribute significantly to success as people get a chance to enter new fields where they can well exploit their potential and reduces laxity on duty due to staying long in one position. Consideration of a person's career success and experience as a prerequisite for selection into managerial roles is one sure way of achieving set objectives as is the case of Ms Delbos and Uchida in the article. Thirdly, to eradicate a tree, one needs to do away with the roots. Meaning to deal with the financial misappropriation allegations then all ties to the former leader Carlos Ghosn have to be broken. The move to get an outsider as a leader and attempting to do away with allies to the former chairman is an indicator of a sense of fairness and accountability which should be embraced in all areas for corporate governance to be a success in the global world.

The Relevance of Media Reporting on Corporate Governance Issues

Media plays an essential role in making corporate governance issues public. According to Clarke, with globalization in place, the corporate governance issues are no longer indoor matters but matters of public interest (Clarke, T. 2007). First, by reporting the media helps managers and all business stakeholders to conform to the legally and socially acceptable standards of corporate governance (Bednar, M.K., 2017). For instance, in the article, the media pointed out the financial misappropriation allegations through the arrest of Ghosn, which necessitated a change in the management style within Renault. It helps the Renault alliance to get back on the right track concerning the use of public resources, taking good care of the shareholders' financial assets and discouraging vices in the organization by recruiting a leader with a clean and admirable record. Secondly, the media reporting brings to the attention of political and regulatory agencies instances where corporate governance violates the law for appropriate action to be taken. Formulation of corporate law reforms to help in avoiding a repetition of misconduct incidences in the future is one way to deal with the situation.

Focusing on the scandal surrounding the Renault-Nissan-Mitsubishi alliance concerning their former chairman's arrest in Japan over financial misconduct in the article, the United States Securities and Exchange Commission takes a step to punish them for their crimes. They do this by the imposition of fines on the victims perpetuating the misconduct, which shows the possible repercussions of violating some laws. Finally, Okhmatovskiy and Shin suggest that media can influence the image of business positively or negatively and subsequently, its capital investment. Depending on the corporate governance issue on focus, media reporting can damage or build a reputation (Okhmatovskiy and Shin, 2018). The Renault get a negative image by a revelation of financial misconduct within their organization. However, they rise above that by adopting reforms that repair their destroyed reputation proving to the public that they can do it. They can achieve their set objectives despite the hit.

Corporate Governance Issues and Their Relevance

Ethical violation is one facet of corporate governance in the global industrial world today. Business, companies and even religious organizations always adhere to a given code of ethics. A corporation's board of directors are obligated to make decisions or perform actions that take the interests of all members and stockholders into consideration. For instance, in a production plant, all decisions made should ensure the health and safety of its employees and the general public is a priority thus reduce or avoid operations that pollute the environment. The recruitment of new staff should be done in a way that all members agree is fair and inclusive. Upholding of ethical standards would help a business or organization achieve milestones of success. A violation of ethics leads to loss of trust, profits and investments in an organization.

Transparency is a term common in all aspects of life, ranging from political, economic to social. It refers to the ability to be seen, openness and honesty. For businesses and corporations, this demands that they provide accurately prepared reports on their profits and losses and avail the information to their financiers, potential investors and all stockholders in their operations. Honesty and openness come into play on achieving this. A lack of these is likely to destroy the reputation and lead to loss of investments. Fines and other legal implications from regulatory agencies are likely to be used against businesses and companies that do not display transparency as revealed by regular audits. Thus, for the sake of all stakeholders in corporations and companies, transparency is very vital.

Accountability is the ability to be held responsible for one's actions or decisions (Dragomir, V., D., 2019). In the corporate global business world, firms and companies should be at a position to be answerable for their actions at any given point. The board of directors or the managerial staff in any organization should be ready all the time to bear responsibility for all operations under their watch. For corporate governance to be efficient and effective, this facet should always be active and strictly followed. Each level in an organization should be accountable to some other body by providing reports and other checks where necessary. Overly, to the general public and relevant stockholders in the organization, an accurate account should be provided for all the decisions made and actions taken. For instance, recruitment of new staff and selling off assets.

Conflicts of interests are bound to occur in different settings, including leadership roles, decision making, among others. It is one of the significant issues of corporate governance that can have impact on the global business world (Courteau, Di Pietra, Giudici, and Melis, 2017). For instance, a manager at a noise pollution control agency who owns a power plant that is noisy to the public may not adequately perform the duties required of them due to this existing conflict. Therefore, in cases similar to this situation corporate governance becomes less effective. Consequently, it becomes indispensable to avoid conflicts of interest as they can lead to loss of trust from shareholders of a business and the general public.

Oversight is a very crucial facet of corporate governance. In the global business world, oversight refers to overseeing of the carrying out of one or more tasks. The board of management have the responsibility of ensuring they put to check all operations in an organization to ensure all parties' interests are protected. Ultimately, no party is exploited by the other in a corporation or business entity. According to Haynes, Zattoni, Boyd and Minichilli, to the oversight function ensures there is a clear outline of achieving the set objectives and that all operations performed, are in this line (Haynes, Zattoni, Boyd and Minichilli, 2019). It is a vital function which ensures the organization sticks within the boundaries of the law serving to protect the reputation and other interests for the good of all shareholders and members.

Conclusion

Corporate governance is a broad area which is very relevant in the modern global business world. It exists to accelerate transparency, accountability and ethics in conduction of businesses and running of various industrial operations. When high-class scandals like the Enron scandal occur, it is quick to question whether corporate governance functions. It is with such cases that corporate governance got relevance, attention and was advanced. Thus, in place to put a check to such scandals, corporate governance has helped in the establishment of capital markets and better resource allocation strategies. It has contributed to businesses gaining stability and good profit and loss margins. As already discussed above the corporate governance issues outlined are crucial to the success of business and corporations in the global business world.

Ethics are fundamental in any operation or organization involving people and with objectives to achieve. A violation should attract serious repercussions so that all the time, ethics are upheld. Strong ethics and strict adherence to them would attract popularity far beyond a country's boundaries. Existence of functional oversight bodies and committees in organizations is inevitable for success and attraction of profits. Oversight would ensure all members and shareholders share a common goal and work to achieving it by always being conscious that their actions are being watched. Conflicts of interests should be reduced as significantly as possible. Any instance detection of them occurs, relevant actions are taken to mitigate them. Accountability and transparency go handy and well embraced; they can make an organization soar to heights of success. Members and all shareholders of organizations should get an education on the importance of maintaining transparency and being accountable all the time for their decisions and actions. To achieve this, owning up responsibility for mistakes would accelerated success.

References

Bednar, M.K., 2017. The Role of the Media in Corporate Governance. In Oxford Research Encyclopedia of Business and Management. retrieved from https://oxfordre.com/business/business/abstract/10.1093/acrefore/9780190224851.001.0001/acrefore-9780190224851-e-87

Clarke, T., 2007. International corporate governance: A comparative approach. Routledge. retrieved from https://books.google.com/books?hl=en&lr=&id=B8v_hDJTDOYC&oi=fnd&pg=PP1&dq=international+corporate+governance&ots=z0RrZ0x9-Q&sig=OuuLN5e8SrXBqDl_9g1iHhVq11Q

Courteau, L., Di Pietra, R., Giudici, P. and Melis, A., 2017. The role and effect of controlling shareholders in corporate governance. Journal of Management & Governance, 21(3), pp.561-572. retrieved from https://link.springer.com/article/10.1007/s10997-016-9365-1

Dragomir, ToV.D., 2019. Accountability in the Name of Global Corporate Governance. A Historical Perspective. The Bucharest Academy of Economic Studies, Romania) www. aecu. gr/files/RomaniaProceedings/20. pdf, accessed, 7. retrieved from http://www.asecu.gr/files/RomaniaProceedings/20.pdf

Haynes, K.T., Zattoni, A., Boyd, B.K. and Minichilli, A., 2019. Figureheads or potentates? CEO power and board oversight in the context of Sarbanes Oxley. Corporate Governance: An International Review, 27(6), pp.402-426. retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1111/corg.12293

Okhmatovskiy, I. and Shin, D., 2018. Changing corp...