Business Finance Homework Help

Please respond to each student 100-150

Student 1

From Chapter 2: When does a corporation need a board of directors?

Board of directors are a separate, parallel form of leadership along with the CEO. Their intentions have to be in the corporation’s best long-term interest (Wheelen et al, 2017). The three groups that make up the corporate governance are the board of directors, top management, and shareholders. 

1. With the past widespread incidences of internal corruption of board of directors, shareholders sometimes question the need for one. Board of directors are in need to direct the affairs of the corporation but not to manage them, in topics of financial position, current strategy, and risks the company may face (2017). Depending on the size of the corporation or the need of the board of directors, it will determine how active and involved the board will participate. 

2. From Chapter 3: What is the relationship between corporate governance and social responsibility?

Social responsibility is the obligation a corporation has to the public and its environment. Beyond the profitable outcome of a corporation’s existence, they have an obligation and responsibility to shareholders, non-corruptive operations, business strategies, and ethical practices (Wheelen et al, 2017). Social responsibility is so influential, that how a corporate governance performs and operates could set the tone to external stakeholders. “[E]veryone’s social responsibility impacts everyone in society and becomes the basis of the new socio-economic order” (Dyck et al, 2014, p. 171). 

Corporate governance has an obligation to each the collective team of the corporation, to the success of the corporation, and to those who are in the recipient of the corporation’s consequences. 

References

Dyck, R. G., & Mulej, M. (2014). Social Responsibility?: Sustainability, Education and Management. Bentham Science Publishers.

Wheelen, T. L., Hunger, D. J., Hoffman, A. N., & Bamford, C. E. (2017). Strategic Management and Business Policy: Globalization, Innovation and Sustainability (15th Edition) (15th ed.). Pearson.

Student 2 

When does a corporation need a board of directors?

The article, Why Do Corporations Need a Board of Directors, defines a board of directors as, “…a composition of people appointed as the representatives of a company’s shareholders so they can make decisions on their behalf,” (upcounsel 2021). The main purpose of the board is to oversee management decisions. A corporation needs a board of directors to protect the interests of the stakeholders. Additionally, it is required by law for organizations to have a board of directors once it has been incorporated. Even when a board of directors is not required, there are several benefits to having one. The board holds the organization accountable and creates an environment of credibility and trustworthiness.

What is the relationship between corporate governance and social responsibility?

Our text defines corporate governance as, “The relationship among the board of directors, top management, and shareholders in determining the direction and performance of a corporation,” (Wheelen 2018). Social responsibility is defined as, “The ethical and discretionary responsibilities a corporation owes its stakeholders,” (Wheelen 2018). These two concepts can interact in either a positive or a negative way for organizations. I will use an example to illustrate this. A corporation’s board of directors could make the decision to focus on maximizing profits over doing what is environmentally safer. This could result in a negative relationship with shareholders and consumers because the organization has chosen profits over the planet. Alternatively, the same organization could choose to redefine its purpose as providing reduced rates on products for low-income individuals. This not only fulfills a social responsibility, but it creates a positive image of the organization.

           An article written by Kezia Farnham expands on the relationship between corporate governance and social responsibility. Farnham states, “…good corporate governance improves the public’s faith and confidence in its corporate leaders,” (Farnham 2021). Consumers having a growing interest in social responsibility and sustainability has increased corporate responsibility to stakeholders. One way to successfully balance an organization’s responsibilities is by adopting the three P’s of the triple – bottom line, (people, profits, and planet).

Meagan Law

References

1. Farnham, K. (2021, June 16). What Is the Relationship Between Corporate Governance and Sustainability? Retrieved from Diligent Insights: https://insights.diligent.com/esg/what-is-the-rela…

upcounsel. (2020, November 3). Why Do Corporations Need a Board of Directors? Retrieved from upcounsel: https://www.upcounsel.com/why-do-corporations-need-a-board-of-directors#:~:text=Corporations%20need%20a%20board%20of%20directors%20because%20while,board%20of%20directors%20is%2C%20in%20itself%2C%20a%20mistake.

Wheelen, T.L., Hunger, J.D., Hoffman, A.N., Bamford, C.E. (2018). Strategic Management and Business Policy: Globalization, Innovation, and Sustainability. Pearson.