Ethical Issues Of Nestle

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Nestle is a leading brand among consumer products in Malaysia. Their head office is located at No.1, Jalan PJU 7/3, Menara Surian, Mutiara Damansara. The company is involved in manufacturing cereals, milk product and beverages. Every household in Malaysia must have bought Nestle products with or without knowing it. Nestle Malaysia manufactures more than 300 halal products in the Malaysian market. Among them are the popular products such as Milo, Nescafe, Maggi, Nespray and KitKat. Nestle has history of more than 100 years in Malaysia. Nestle was originally founded by a pharmacist named Henri Nestle in 1867. The main purpose of the company back then is to develop alternative healthy and economical source of infant nutrition. Meanwhile, Nestle…show more content…
It has eleven titles with numbers of provision that changes the reporting, directors’ obligation of public companies, the directors and officers. The Sarbanes-Oxley Act is expected to overcome issues regarding corporate failures and restore investors’ confidence and achieve quality governance. This act is mandatory to all large and small organizations. Its provision intended to deter and punish corporate and accounting fraud and corruption with severe penalties. At the same time to protect the interest of workers and shareholders. Although the act became effective there are still certain section is ineffective depending on the Securities and Exchange Commission (SEC) to adopt relevant rules. 3. Importance of Corporate Governance The corporate governance is an important part of the management system used by various countries. For emerging countries improving corporate governance can give positive results in their policy objectives. Corporate governance is primarily important to set out principles and best practices on structures and processes which company may use to achieve optimal governance framework. This framework exists at all level such as the composition of the board, procedures for recruiting new directors, remuneration of directors, the use of board committees, their mandates and their…show more content…
As we know the Cadbury Report was initiated because of the past scams, frauds and corrupt practices by the board directors. Things as such always happen in the many business environments, companies and even government offices. In order to avoid these kinds of malpractices, corporate governance has proved very essential for managing the company. For example, the Sarbanes-Oxley Act explains that all publicly traded firms must be accountable to a government appointed Public Company Oversight Board comprising 5 members who are “financially literate”. Then out of 5 members, two members must be Certified Public Accountants (CPAs). The oversight board is totally responsible to make guidelines for external auditors in reviewing of financial information pertaining to the company. The act makes compulsion that the external auditors reviewing the financial statements are restricted to performing audit based tasks. External auditors are also not allowed to perform bookkeeping functions or do non-audit based consulting. Furthermore the company’s audit committee must pre-approve all the services provided by the external
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