Corporate Governance Two Different, Yet Related Corporate Research Paper

Corporate Governance

Two different, yet related corporate governance definitions have been presented in this paper (Mallin, 2006: 3). Sometimes they cause confusions and controversy and ultimately affect the implementation of tightening of governance (Windsor, 2009).

The 1992 Cadbury Report, which presented the major proposals for tightening governance, described governance as the system through which firms are managed, regulated and supervised (Cadbury, 1992: 15). The fundamental agency idea emphasizes that corporate governance has to deal with those ways in which corporate financial suppliers guarantee themselves of attainment of a positive return on investment (Shleifer and Vishny, 1997: 737). Corporate Governance can be described more generally (Weil and Manges, 2002: 1). The OECD principles, which were revised in 2004 explain the governance as a set of stakeholder job relationships along with the structure for defining, achieving, and monitoring corporate goals as well as performance (Mallin, 2006: 3).

The mixture of these two definitions directly affects the organizational design of control, which focuses on top management. The difference between two definitions is related to the role of stakeholders, which have no investment in the company. The agency view of the governance has restricted the governance only to the financial stakeholders. On the other hand, the OCED principles broaden the governance role to other stakeholders as well. EU requires both; tightening of governance and increase expenditure on CSR. UK bases study also suggests the broader stakeholders approach (Windsor, 2009).

The OECD Corporate Governance principles: External Control of Corporations

The main OCED principles revolve around stockholders and cutsomers. The financial stakeholders have become more active as observed at Telstra in Australia (Washington, 2007). The management should understand the growing concern. The short-term profitability initiatives by stock-based managerial incentives do not lay foundation of sustainable long-term strategy (Zhang et al., 2008).

This growing pressure is direct result of corporate scandals and financial crisis since 1980s. Given the recent financial scandals (Harris, 2008), the U.S. stock exchanges have tightened the listing requirements. Corporate scandals destroy the reputation of corporate sector (Fombrun, 2006), and they led to Sarbanes-Oxley Act of 2002 (SOX). Like UK and U.S., the EU nations are also facing the growing demand of strict corporate governance. MNCs should operate in complete compliance with local and host country's laws (Windsor, 2009).

Some pressure is from the government side as we observe in the U.S. response to the global scandals by Foreign Corrupt Practices Act of 1977 (FCPA), which make it compulsory for every kind of organization to maintain the record of record keeping. There is a handsome debate in the U.S. circles over the cost and benefits of SOX (Brick and Chidambaran, 2008). Since late 2006, lots of governments across the globe have increased their market interventions, now the public companies will have to address the significant cross continental and governmental concerns (Boddewyn, 2007).

Earlier, OCED issued its guidelines in 1976 and revised them in 2000, which state that a company should not only support but also uphold high-quality corporate governance standards. Furthermore, it should not only develop but also apply these governance practices (OECD, 2000: 19). These comprehensive guidelines motivate the firms in communicating not just social but ethical, and environmental policies, as well as, codes of conduct, and material information, with regards to governance and its structure, key policies, management and stakeholder associations (OECD, 2000: 5, 20).

A very significant occurrence has taken place in various countries; where the inquiries are being conducted into corporate governance standards and practices (Erakovic, 2007). This is especially true after the publication of OCED principles. The London Stock Exchange (LSE), for instance, constituted the Cadbury Committee after the major British corporate scandals. The 1992 Cadbury presented a report which contained 19 suggestions in a non-binding Code of Best Practice for recovering financial performance, which were developed after the study of companies, which were generally well managed (Cadbury, 2006:21-22). These recommendations stay the central prescriptions for corporate governance standards and practices. Annual disclosure statements were required by LSE in reference to the study the reasons for non-compliance and its areas (Cadbury, 2006: 23). Since many prescriptions proved contentious or inadequate, so, there were various studies conducted afterwards (such as the Greenbury Report in 1995 and the Hampel Report in 1998) and a Joint Code (Jones and Pollitt, 2004). These inquiries incorporated directors' payment; broad internal control outside of financial supervision; board administration of risk management; non-executive directors; as well as administration of BOD (Windsor, 2009).Marketing and Corporate Governance

Gone are the days when public sector employees held natural respect and attention towards their customers. Now being a public sector organization doesn't give the privilege to just arrange the product or service and wait for the customer to come by himself. This is the age of marketing, the age of satisfying customer, customer and only customer. Whether it's manufacturing or services or even a human being looking for job, all of them need the right marketing to satisfy the one who pays for their work. The concept of complete customer satisfaction isn't just limited to the kind of product. It has also entered the domain of who is selling them. This is where the small businesses can come into play.

During these customer-is-always-right days, the small businesses need marketing and customer satisfaction tools to make the customer know, understand and like their service. For instance, St. Clair (1993) examines how organizations can better serve their customers in the age of information; the author explains the basic principle of trying to put your feet in the others' shoes. In order to make the customer perceptions better, the management will need to look at themselves from customers' perspective. They will need to know what customers really expect, actually get and just do not value. Now that we are viewing the small businesses (even though non-profit or not-for-profit), we can use basic business research methods to ascertain what customers want. Three of those basic methods include the following three most commonly used methods:

1. Conducting customer surveys;

2. Performing a needs analysis; and

3. Conducting an information audit (St. Clair, 1993).

Conducting customer surveys involves developing questionnaires about customer's perception of services and getting them filled by the customers; on a higher level, performing a needs analysis means interviewing the customers yourself or through focus groups. Focus groups have a slightly more formal approach where more customer effort is needed to provide feedback. Specifically, focus groups are little groups that take part in deliberations over service quality problems. A mediator is present to conduct the sessions. On an even more complex level, information audits are performed which entails intricate procedures of analyzing the information sources along with the services to achieve better information passage and more transparent customer to management channels (St. Clair, 1993). A Customer Service Plan capturing goals and standards for customer service is also recommended by a number of researchers. However, the plan itself won't be enough unless it is followed up by the usage of survey, focus groups and continuous consumer behavior and satisfaction surveillance.

Current Service Assessment Models

Current research literature suggests that performance measures, quality assessment, public accountability and benchmarking have been used extensively in government and higher education literature since the 1990s (Harer and Cole, 2005 p 150).

In fact, in the past few years, the small businesses community has seen an increase in assessment activities directing shifts in technology and higher education. Most assessments attempt to survey, measure predict, or analyze. According to Hernon & Altman (1996), "there are at least eleven questions about which assessment can be made: how much, how many, how economical, how prompt, how accurate, how responsive, how well, how valuable, how reliable, how courteous, and how satisfied." Thomas & Robson (2004) in their study found that assessments that yield useful information should answer the following questions before attempts are made to gather data. The questions include: what you want to know, why you want to know it, from whom will you gather the information, how will you gather the information, and how will you use the information (Thomas & Robson, 2004). These assessments questions should support the creation of unambiguous measurable results. Many small businesses have pondered the actual selection of items for evaluation. The frontline service would include OPAC services, website content, and user education. The core services could possibly include adequacy, availability, and accessibility of course and assignment use, appearance and assistance of staff, provision of technology and waiting time for borrowing and reference services. Some of the peripheral services would include signage, appropriate opening hours, provision of space, ambience, and availability of leisure reading materials.

Foundations for Defining Quality

Initial assessments focused mainly on mundane counts including circulation, reference, and acquisition counts. Early indicators of success relied on these number for retrospective and current views. Missing from the counting.....