With the increase use of information technology and office automation, the information requirement of the financial institution, management and investors has enhanced into many fold. It is a known fact that vital needs of success of any organization depends on its ability to mobilize and utilise all kinds of resources to meet the objectives clearly set as part of the planning process. Both internal and external factors are necessary for well management of financial institution, the latter include availability, cost effectiveness; technological advancement. Increasingly, revelations of deterioration in quality and transparency, have called for adoption of internationally accepted ‘Best Practices’. Corporate governance is about ethical conduct …show more content…
Effective corporate governance practices are essential in achieving and maintaining public trust and confidence on the financial institutions, which are critical to the proper functioning of the institutions and economy as a whole. Poor corporate governance result into failure in financial institutions, which can pose significant public costs and consequences due to their potential impact on any applicable deposit protection systems and the possibility of broader macroeconomic implications, such as contagion risk and impact on payment systems. In addition, poor corporate governance can lead markets to lose confidence on the ability of financial institutions to properly manage its assets and liabilities, including deposits, which could in turn trigger a financial institutions run or liquidity crisis. Indeed, in addition to their responsibilities to shareholders, financial institutions also have a responsibility to their …show more content…
I. Quality and concentration of ownership
The ownership issue in financial institution includes a few crucial matters that have been engaging our attention and a policy environment is being sought to be created that would confirm to the best principles of governance. Unique corporate governance challenges are posed where the ownership structure lacks transparency or where there is insufficient checks and balances on inappropriate influences of controlling shareholders. While there can be different views on the issue of concentrated ownership, there is clearly recognition that significant shareholders should pass the fitness and propriety tests.
II. Quality of management
Senior management consists of a core group of individuals responsible for the day to day management of the financial institutions –should have necessary skills and oversee line managers in specific business areas and activities consist of policies and procedures laid down by the Board.
Senior Management establishes effective system of internal
Beginning with bank reform, the New Dealers were able to maintain oversight in the banking industry, which had previously been an unregulated and unpredictable source of capital. The Glass-Steagal Act and the Emergency Banking Act signaled a shift from a lassiez faire approach to the banking industry to one that ensured banks were making responsible loans and not gambling with depositor’s savings in the stock market. By not allowing banks who were considered “irresponsible’ to reopen and separating the savings and investment functions of the banks, a more secure system began to emerge. The impact of this legislation was immediate, as bank failures dropped dramatically. Additionally, major breakdowns in the banking industry were avoided until fairly recently, which came as a result of the repeal of Glass-Steagal.
Ethical issues should be seen in the organization and they must bring a change when they have discovered that it is not moving as per the rules of the ethical standards, so that the employees have a chance to present their views to solve the issue collectively with their own views and ideas. Independent social auditing which is conducted by an external party regularly or without prior announcement should have been a boon in the case of Lehman Brothers. The audit result which was taken by the external auditors must be exposed to the public square, for further scrutiny so that the public can come to know the performance of the whole organisation without any doubts. This would have showed the effort lessens the opportunity for retaliation from those being audited which was the company’s own board where they manipulated according to their own wants and desires which in the end resulted in the decline of the one of the top listed company in wall street ‘Lehman
These smaller groups are assigned to a particular field of service. Each semi-autonomous group has a group head who is designated as the Executive officer or Vice-President of that particular section. The top executive of a specific section only manages the general activities such as hiring and budgeting of that particular section only. The divisional hierarchy prevalent in the Bank of America has various advantages associated with it.
2.a) The school Governors are volunteers who ensure a school is run efficiently, they work with the school to deliver good quality education, they set the schools aims and policies whilst working with the head teacher. They also make sure the schools budget is spent correctly and the building is being run well and safely. Senior Management Team (SMT) consists of the head teacher, deputy heads and the heads of the departments. They have a collective responsibility for the efficient daily running and discipline of the school, assisting the head teacher in leadership and management and is designed to allow strategic day to day responsibilities.
The Failure of Dick Smith Electronics Identify: How the latest edition (3rd) of the ASX Corporate Governance Principles plausibly halts the failure of Dick Smith Electronics (DSE) will be discussed in this essay. I argue that 3rd of ASX Corporate Governance Principles might not be the best corporate governance practices for the listed entities in Australia. As can be seen from the DSE case, it complied with the majority of the principles and recommendations, but the DSE’s collapse still happened. Therefore, the better application of this practices should be developed.
Leadership Understanding how your organization’s senior leadership personal actions guide and sustain an organization important; they are the individuals that set the example for others to follow, their actions set the tone of the organization. Senior Leadership Senior leaders guide and sustain an organization; they communicated not only through words but with their actions as well. Vision, values and mission Senior leadership within the 603rd Air Communication Squadron set organizational values by building upon the Air Force Core values of integrity first, service before self, and excellence in all we do.
Executive Summary Lehman Brothers were an investment bank involved in transactions worth billions of dollars and one of the most powerful investment banks in the world. Lehman Brothers collapsed in 2008 following bad investment in the sub-prime mortgage market and used bad accounting practices called Repo 105 transactions to try and cover up the bad assets. This report sets out the use of the fraud triangle when describing the actions which led to the collapse. The pressure applied on the bank, the opportunity due to the lack of regulation to carry out the actions and the ability of the bank to rationalise their decision making.
The top level of management for the Blackberry Limited Company is responsible for monitoring and supervising other management levels of the company. The top management levels make major decisions concerning policies and also allow the lower management levels to make their own decision concerning day to day affairs. Implications of centralization: 1. It is easier to maintain secrecy.
However, both of these conditions are quite difficult to achieve in the workplace. The implications of this research in the real world are evident and plenty. This research provides a general framework for how businesses and groups should operate. Instituting a hierarchy is an essential step to an organized and efficient firm. Based on the results and conclusion of this article, the researchers took the initiative of supplying more advice on effective business managing that had been extrapolated from their data.
Organization structure – The whole activies are divided in the department and the responsibility and hirenchy of each department is well defined. However Senior management needs to be more focused on Strategic Initiative rather than Daily Operations .For this it is Important to develop a second Rung of Leadership. Human Resource Plan – The Human resourse plant is defined for all the employee and the system for the recruiting , training & development, benefits and reward is well established.
However such standards can have both negative and positive influences. Reliance must be made according to various types of theories to interject a cohesive organization. Although subordinates may always negatively respond to management, and vic-versa, significant cohesive response needs to be made. Suitable enforcement must be constructed to correctly signify a suitable department. Additionally cohesive managerial leadership is crucial for a well incorporated department.
INDIAN INSTITUTE OF MANAGEMENT, AHMEDABAD ORGANIZATIONAL EXCELLENCE (NESTLE) Submitted in partial fulfilment of the requirements of the course Understanding People & Organizations Instructor: Prof. Vishal Gupta Academic Associate: Rachna Arora Submitted on July 5, 2015 by Anant Yadav Ashish Gupta Anandini Arora Section C Study Group C-1 (A) ORGANIZATIONAL BEHAVIOUR OF “NESTLE” Nestle is the largest global food and beverage company in the world in terms of revenues, with a 148-year history.
Ethical issues in accounting and finance. Summary This task analysis the issue of ethics in accounting and finance as discussed in the International Journal of accounting and finance. Currently, ethics of any firm is an important topic due to the numerous scandals that have taken place in different countries which have resulted in damage to the economy and society.
A system to check and balances the benefit of all the board of directors and to avoid some of top management from making decisions that only benefit themselves is created and named corporate governance. Corporate governance means the system of rules, practices and processes by which a company is directed and controlled. The set of rules provided as a guidelines for the board of directors to make sure that accountability and fairness in a company’s relationship with its stakeholders such as financiers, customers, management, employees, shareholders and also society in order to achieve company’s goals and targets in a manner that add a value to the company. All of the stakeholders play an important role in corporate governance to ensure that
Review of Literature Unethical behavior can tarnish a company’s image and reputation. If a company is unethical, they may have to spend additional money to improve their public image, as well as gain back as many customers as possible. The reason I have chosen to use articles that are quite a few years old and that are not so recent is because I feel that they are very good examples of what I am trying to prove in the terms of ethical behaviour within companies and these specific articles relate well to my chosen topic.