Corporate Governance Essay

1525 WordsNov 10, 20097 Pages
Corporate Governance Transparency Corporations have become more compliant since the Sarbanes Oxley Act was passed by the government in 2002. Transparency in Corporate Governance has helped restore faith in investors. Transparency refers to the material information corporations must now disclose to the public. McBride must establish a similar transparent corporate governance plan to gain confidence in investors and reach their goal of expanding their operations to five states. The first step in corporate governance transparency is to disclose an organizations financial statement showing financial performance and the financial situation of the organization. Currently, McBrides financial statement has shown negative numbers, however the expansion of the new offices could deem the company profitable. Hugh McBride is not showing the necessary focus needed on his financial statements at the moment. Hugh McBride says “don’t bother the brokers or Mike with this stuff…they are swamped drumming-up business and getting our systems in order…handle the accounting stuff yourself” (UoP 2009). The second step is defining the companies objectives. Companies need to disclose the policies set in place referring to business ethics, business environment, and other public policy commitments. Currently, all of McBride’s business policies are revolved around Hugh McBride. Hugh McBride has not familiarized himself with the best practices of corporate governance which could shake the investors’ confidence. The third step is disclosing major share ownership and voting rights. Currently, Hugh McBride has majority share of the voting rights in McBride Financial and doesn’t want to dilute his shares. The board structure he wants to create is self appointed board members who are not active and will let him make all of the decisions. Board

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