Sample Report On Corporate Governance
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Corporate governance involves the rules, processes and practices of how a company is run, controlled and directed. This means all shareholders, customers, suppliers, financiers, the community and the government should all be part of corporate governance. The Coca-cola company (NYSE: KO) is an American multinational beverage manufacturer, retailer and marketer whose headquarters are located in Atlanta, Georgia.
It is known for the manufacture of nonalcoholic beverages and syrups. Its top brands are Fanta, Sprite, Coca-Cola Zero, Diet Coke, Minute Maid, simply, vitamin water, Del Valle and Georgia. It produces over 500 brands and 3,500 beverage products. They are worldwide brands known for soft beverages. The company has the largest distribution system, with over 200 countries with a rate of 1.8 million servings a day. Coca-Cola operates on a franchise distribution system. It produces the syrup concentrate that are later sold to different bottlers all over the world who have an established territory. These suppliers have to fit into certain criteria in order to qualify as a Coca-Cola distributor.
The company not only serves beverages but has a strong corporate social responsibility team. This teams works together with other partners in initiatives that reduce environmental footprints, support active and healthy living, enhance economic development in the communities where they are based, and create a safe and inclusive work area. Together with their bottling partners Coca-cola is ranked the world top ten private employers with over 700,000 system associates (Coca-Cola, 2015, p. 1).
Coca-cola has a charter that is set for the Board of Directors to help them perform their duties. They make most decisions of the decisions in the company; they are provided with a charter that involves all stakeholders. The charter is divided into various parts. The first part of the charter is the selection and composition of the board. In this section, there are various parts. The first part is the board membership criteria. This is usually done by the governance and nominating committee. The process is done annually where the skills and practices of the board members are checked. In Coca-cola, the charter states "A Board member who also serves as chief executive officer (or equivalent position) at another company should not serve on more than two additional public company boards (for a total of four public company boards). Other Board members should not serve on more than four public company boards in addition to the Company's. These restrictions shall not apply retroactively to board memberships held at the date of the adoption of this Charter (Coke enterprises)."
The second part is on predominance of the independent directors and its constitution. This spells out the qualifications of independent directors and their role in the company. The other part is on the coca cola relationship. The company is expected to have various relationships with other firms and stakeholders. This part describes how the relationship should be conducted. The company acknowledges that it has millions of stakeholders, and each one of them should be given special treatment. The stakeholders are divided into various groups depending on their contribution to the company. This makes it easy for the company it to govern all of them and to ensure that they have a good relationship.
The second section is on board leadership. The Board is the overall director of the entire company. The chairman and the CEO have their duties spelled out in the charter. The presiding director too has his or her section where it stipulated on their nomination and duties in the company. The other section of the charter is the expectations of the directors. When elected to office, the directors are expected to deliver. They are given goals and objectives to achieve while still in office. If any of them does not reach the expectations, they are forced to face the consequences stated in the charter. The retirement age and benefits are also explained in this section. Assessments are the next section on assessments. The company cannot go on successfully without being checked all the time. There are goals and objectives to be achieved in the company. Some of them are required to go step by step.
The following step will have to be done so that permission can be granted to the next stage. All employees and suppliers are assessed in this stage. Since the company is multinational, the company collects reports from all the other branches and puts them together. If any branch has issues, it is included in the report, and necessary action is taken. Each branch is run as an individual company, but all reports are forwarded to the main office for approval (Martin, 2006, p. 65).
The next chapter in this charter is based on each stakeholder. The government is one of the most important stakeholders. It determines most of the major operations of the company. The company is run under the business Acts of all the governments in each branch. Coca Cola has to incorporate all of them because failure to this will lead to the closure of the branches. This becomes a bit tricky for the company but so far it has tried its best to ensure that it has complied and come to an agreement with all regulation in the different countries. The other stakeholders in the company's charter are the customers. These form the largest percentage of the stakeholders. All customers' needs should be met. This has however been possible.
For the many years Coca-Cola has been around; it has mastered the art of satisfying individual customers. Each branch is given the responsibility of understanding its customers. All the findings are forwarded to the main office for approval. This is a factor that has led to the success of the company. Most of the recommendations are approved, and this is why most of the coca cola customers worldwide.
Suppliers are responsible for providing raw materials to all the branches in the world. In coca cola, raw materials are referred to as inputs. They are also referred to raw materials. They are used in the production to come up with the final product. The raw materials used by Coca-cola are nutritive and non-nutritive sweeteners. In the United States, the main nutritive sweetener is high fructose corn syrup that is a form of sugar. This syrup is available from different domestic sources and is historically known for fluctuations in market prices. Outside United States, the principal input is sucrose that is also a form of sugar. There have not been any difficulties by the company in obtaining these raw materials due to the good relationship the company has with its suppliers. The principle non-nutritive sweeteners for Coca-cola are saccharin, ame, cyclamate, acesulfame potassium, and sucralose.
These materials are readily available from unique suppliers in the world. The company purchases aspartame, which is an important sweetener that is usually alone or in combinations with other non-nutritive sweetener like Saccharin or acesulfame potassium. Acesulfame Potassium is only obtained from Nutrinova Nutrition Specialties and Food Ingredients GmbH (Coca-Cola, 2015, p. 1). This is an example of a supplier who is only dedicated to the company and helps the company in producing unique products in the market. The company proudly says that it has not had any difficulties in obtaining its requirements for nutritive and non-nutritive sweeteners. The community also benefits a lot from the company though the corporate social responsibility in the organization. This department is responsible for giving back to the community. Each branch has this department that ensures that the community benefits in different ways. This leads to an international approval of the company in terms of helping its people. Many parts of the world are beneficiaries of the success story of
These are the tools used by the company towards achieving its success. One of the principles used in the Coca-cola incorporate governance is ethics (Sison, 2008, p. 188). This is one important factor that many companies ensure that they uphold. This is found in the code of business conduct under the ethics and compliance department. Discipline, honesty, competence, honesty, and trust are some of the important details that are required for all stakeholders. This is one of the ways where the company gains prestige. It ensures that all branches practice these virtues. No one is spared from the virtues; everybody has to practice them. There have been cases in Coca-Cola that have led people to thinking that the company is not ethical. These were, however, the mistakes of some people. This is normal because human beings will make mistakes. Those who go against the virtues face the disciplinary committee. This is a committee in each branch that is set to monitor the ethical performance of the employees. They are punished accordingly depending on the weight of their mistake.
Coca-Cola has managed to build a good name brand name due to its standards. All the products manufactured by coca cola have matured with time. There are new additions or decline in sue of some substances to make the products unique. This is something that has also managed to help the company stay ahead of the competition. Being an international company, Coca-Cola understand that there are many competitors in every country. This has however been solved by the company commanding a lot of presence in the market. The products are sold by many small scale and large scale retailers. They have targeted the entire market because anybody can take the products.
Specialization comes together with standards. The company has come up with many diverse products making everybody have a different type depending on their personal needs to get maximum satisfaction. The products are well manufactured, and there are rare cases of misconducts in the products. Stakeholders are also expected to keep these standards. None of them is allowed to go below these standards. This is something that helped the company maintain its standards of performance (Kleindl, 2007, p. 100).
The company is focused on making money. This shows that it is important to have an audit department. This is the body of the company that ensures that every stakeholder is doing their job right. It is not easy to have all branches audited from the central office. Each branch is expected to submit its audit report to the main office. This will show how performance has been carried out in the branches. From all the audit reports, the Coca-cola comes up with a report that is given to all shareholders. They will know the performance of their company and will expect all explanations to be given by the board of directors. Cooperate governance requires openness and the audit team is expected to give all the information it has acquired in order to help the company progress further.
Compliance levels are important in this company. They are not the same for each company nut they have their limits. Each branch is expected to comply with all the major rules set by the main stakeholders. All stakeholders re have to comply with the levels. One of the qualities is that every serving should be done with quality. Despite the diverse products in different markets, all coca cola products are sold and packaged in a similar way. They all represent quality and class that was treated many years ago (Fernando, 2009, p. 87). Safety is something that the company has worked hard on. All products are safe to use. There are, however, many controversies facing the company's products. This was ignored by the company saying that it was a form of defamation. The company serves too many people for many years, and they have mastered the art of good quality.
Corporate governance also includes good understanding and managerial skills. The management is in charge of the success of the company. This means it is responsible for satisfying all stakeholders. If the management is bad, the stakeholder will not be satisfied and the performance will be poor. This is why Coca cola has ensured that its stakeholders are satisfied. In every branch, there is a unique department which is under the human resource that ensures that all needs are met. It also seeks to find any suggestions or complaints to the stakeholders are usually addressed with appropriate measures. This is not easy for an international company like Coca Cola, but it has to ensure that all customers are satisfied at all times. These departments in Coca cola report to every human resource which reports to the management of each branch.
Money is important when it comes to corporate governance. All stakeholders are in the company for different reasons or another but overall, cash is their main goal. The finance department has to address the entire financial crisis in the company. Failure to do so, there will be wrangle sin the company which might become a threat to the performance of the company. Customers are responsible for buying products and bringing cash to the business. If the products are not for the set standards and quality, the products will not be bought. This means that all employees would work hard to ensure that the products are good. The suppliers also should produce the best raw materials they have. The financiers and the shareholders should give enough capital to the suppliers in order for them to supply quality products. This shows that if all stakeholders do not play their role well, the products will not be purchased and this will lead to losses. This is why every company should have a charter that gives all details on the functions of every stakeholder. If any of the stakeholders is left out, it will mean that the company will fail and that the goals will not be achieved.
There are few recommendations to make to this company. The corporate governance seems to be more in the employees than other stakeholders. Although they are responsible for running the company, other stakeholders play a big role in the success of the company. There are regulations to be followed, and the stakeholders will comply with them if they are given a lot of attention. Secondly, the tools for keeping the company moving should also be adjusted. The penalties for unhealthy behavior should be included in the charter. There are, however, different in every branch, but there are some that should be made general for all employees. Some employees feel that they are being treated unfairly when compared to others. This could bring a shift in the employees' performance. Some may feel they are being treated unfairly, and this could lead to strikes. This could damage the image of the company. Image is important to a company.
Coca-Cola has been accused a number of times of producing products that were harmful to people. All stakeholders should come together to clear this mess. The management should ensure that they do the most work. They should prove the competitors wrong by not leaving any loopholes. Any problems with corporate governance charter can be used against the company in terms of competition (Martin, 2006, p 88). A competitor will look at the weakest point and take it as an advantage. The competitor will maximize on this and will destruct the success of the company. Coca-Cola should be proud that so far it has great command in all markets and all their markets at least everybody has heard if not tested the products. If the company put all this recommendation into practice, the company will be much successful.
Coca-Cola., 2015. Coca-cola company (NYSE: KO). Retrieved from http://www.coca-colacompany.com/
Coca-cola enterprises., 2015. Corporate Governance Retrieved from: http://ir.cokecce.com/phoenix.zhtml?c=117435&p=irol-govdocs
Fernando, A. C., 2009. Corporate governance: Principles, policies and practices. New Delhi: Pearson Education.
Kleindl, B., 2007. International marketing. Mason, Ohio: Thomson Higher Education.
Martin, D., 2006. Corporate Governance: Practical Guidance on Accountability Requirements. London: Thorogood Pub.
Sison, A. G., 2008. Corporate governance and ethics: An Aristotelian perspective. Cheltenham, UK: Edward Elgar.
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