Governance in Globalizing World Samples †MyAssignmenthelp.com

Question: Discuss about the Governance in Globalizing World. Answer: Directors acting dishonestly should be criminally investigated. If found guilty they should be liable for imprisonment and repayment of funds dishonestly obtained. Discuss. Use Agency theory to support your answer The corporate watchdog has warned the directors after a former chairman of a technological company was sent to jail for 10 years (Bednar, 2012). The directors of many companies have been sent notices about the prospect of heavy penalty if the legal duties are not met properly. For an example it is witnessed that he former chairman of TZ Ltd, Andrew Sigalla was found guilty because making fraudulent movements inside the environment of the company. The boy from Sydney stole almost $9 million from the fund of the company. In the later stages the court found that the boy was addicted to gambling and had to repay $10 million mortgage. The court added that the 51 year old boy was related with robbing the company of considerable cash. The boy was sent to jail for 10 years and 6years of the imprisonment was non-parole. It is the clear case of fraudulent activities by the director of a particular company (Circulation of initiative petitions, 2011). In this case it can be said that the directo r must be sent to jails and must not be set free. If the evidences are strong and if the guilty is proved then the court has taken the right decision in the case of Sigalla. Agency theory is perfect for this case in order to explain the situation in an effective way. Agency theory is actually a supposition that actually elaborates the relationship between principals and agents. The most known agency relationship occurs between shareholders and the executive of the company. Agency theory has many parts through which the scenario can be supported effectively. The steps are as follows, Principals and Agents in Finance Goals and information Differences in risk tolerance Legal Fiduciary Responsibilities Board diversity is not important and directors should be appointed and retained based on merit. Discuss. Use Stewardship theory and Stakeholder theory to support your arguments Stewardship theory is basically a theory where the rejection of assumed agency theory can be seen. This theory actually says about the managerial goals where the managers must focus on achieving organizational goal rather than achieving individual targets. In the above case it can be assumed that the directors of the companies must be retained for the sake of the organization. There are some cases where the directors are found guilty of making fraudulent movement inside the organization. In these cases the company must take appropriate decision for the sake of the organization (Bhasin, 2012). In the article it has been seen that Sigalla was found guilty while stealing cash from the company in order to satisfy own desire. In two ways it is not acceptable at all. First of all its a crime and secondly it has not maintained stewardship theory in any cases. There are many ways through which the company can overcome these kinds of situations. They can retain the director based on his or he r merits after the completion of his/her punishment. Appointing the directors also can be done based on their merits but in the case of Sigalla the business was family business and he was appointed automatically after the death of his father. This is a different case that is why the scenario of the case is totally separate from usual cases but at the end of everything, the activities must be done in favor of the organization. In the field of stakeholder theory the scenario of the article can also be connected (Bonnafous-Boucher, 2016). Stakeholder theory says that the employees of a particular company must focus on the organizational objectives rather than focusing on individual tasks. It can also be connected with the given scenario in the article where Sigalla favored the gambling option in order to satisfy himself with his own desires. However TZ Ltd may take the decision of retaining the director after the completion of punishment of Sigalla (Briefing, 2015). Family companies operate with different corporate governance rules than companies owned by non-family shareholders. Family owned companies should be able to operate in a way that benefits family members. Discuss. Use Resource Dependence theory and Stewardship theory to support your answer In the case scenario it has been seen that Joseph Gutnick has been facing many problematic situations while running his family business (Dyer and Dyer, 2009). There are scandals and news about him that he is trying to hide his property form the other family members where Mr. Joseph has stated that all of these statements are not true. He became amazed and disproved that all of this allegations are made by his brother Abraham Gutnick. Abraham Gutnick has continuously stated that his brother Joseph Gutnick is trying to hide his assets from his family members. This statement was made in the early stages of 2015. Later stages of 2015 the lawyer of Abraham Gutnick tried to stop his family from being dispossessed by the new owners of the part of the property he had long rented from one of Gutnicks brothers companies. The property of Gutnick family was sold to Balaclava Heights in 2015 and just after this it evict Abraham Gutnick. Through this scenario it can be seen and said that family bu siness must not be disposed to the outsider and the profit of the family business must be kept within the members of the family. Stewardship theory has stated that the benefit of the organization must be kept for the members of the organization so that the organization gets all the benefits from it (Glinkowska and Kaczmarek, 2015). It is obvious that the profit of the business can be crucial for the members of the organization. It will help the employees of the company to achieve the organizational target efficiently. Dependence theory actually says that the poor countries take loans from the rich countries in order to continue their runs in this race. It is obvious that the family businesses are independent and do not need to take help from the outsiders but if the outsiders get involved with the family business then the business becomes dependent on the outsiders where the main problem arises. In order to achieve benefits in the family business, the policies of businesses must be kept secretly and must not disclosed to any outsiders (Borchers, Deskins and Ross, 2015). Outsiders will always try to take advantages of the family businesses in order to satisfy their own desires. It can be said that involving the outsiders in the family business can be the worst decision in terms of getting benefits and it can harm the scenario of the business too as it has been seen in the article. Superannuation (Pension) funds have the right and responsibility to influence decisions of companies in which they own shares and to ensure the companies act in a socially responsible manner The main problem in this case is the absence of women in the post of directors of board in various companies. The Australian Council of Superannuation Investors, which actually represents $450 billion in assets of more than $8 million Australian super fund members. They have stated that time is up for the male members in the boards of directors. A research of ACSI has stated that there are 13 companies in Australia where there no women directors in the board of directors list. The companies include, telecommunications giant TPG, CIMIC Group, Flight Centre, Investa and Qube Holdings. ACSI has expected that at the end of 2017 they have expected to increase the number of women directors to 30 percent. Somehow it is not happening according to ACSI. Superannuation funds have the right to influence the decisions of the companies and to force the companies to include women board members in the directory team. It can be said they want to distribute the right of authority among the males and the females in a proper mannerism. So these steps are in favor of the women of the country who are still struggling to take part in the ruling committee of multiple companies all around the country. There are many companies whose board members have said that they are happy with the way the work is going on and that is why they do not need any further changes in the committee. This is stated by Ms. Davidson. The members have added more that the members are chosen based on their merits where Ms. Davidson has not found any clue for which the women are neglected in such ways. Although Ms. Davidson has told that the members have started to give support in favor of the women where the women will get their chances to be the part of board of directors in the certain upcoming future. References Bednar, M. (2012). Watchdog or Lapdog? A Behavioral View of the Media as a Corporate Governance Mechanism.Academy of Management Journal, 55(1), pp.131-150. Bhasin, S. (2012). An appropriate change strategy for lean success.Management Decision, 50(3), pp.439-458. Bonnafous-Boucher, M. (2016).Stakeholder theory. 1st ed. [Place of publication not identified]: Springer International Pu. Borchers, E., Deskins, J. and Ross, A. (2015). CAN STATE TAX POLICIES BE USED TO GROW SMALL AND LARGE BUSINESSES?.Contemporary Economic Policy, 34(2), pp.312-335. Briefing. (2015).Recruiting Retaining Adult Learners, 17(8), pp.2-2. Circulation of initiative petitions. (2011). 1st ed. Denver, Colo.: Department of State, Elections Division. Dyer, W. and Dyer, W. (2009). Putting the Family Into Family Business Research.Family Business Review, 22(3), pp.216-219. Glinkowska, B. and Kaczmarek, B. (2015). Classical and modern concepts of corporate governance (Stewardship Theory and Agency Theory).Management, 19(2).