Posted by admin | Posted in fly fishing | Posted on 16-08-2010
Tags: 3d, cool, drawing, loomis and wood model, loomis model, loomis model homes, reference, software
 |
 G LOOMIS Venture Model 3 Spare Spool $65.00 Time Remaining: 17h 31m Buy It Now for only: $65.00 |
 G Loomis Syncrotech Gl 8 9 10 Fly Reel Original Model $240.00 Time Remaining: 9d 1h 26m Buy It Now for only: $275.00 |
 G LOOMIS Model 7 8 Current Fly Reel FREE SHIP+HAT $290.00 Time Remaining: 17h 23m Buy It Now for only: $290.00 |
 G LOOMIS Model 5 6 Current Fly Reel FREE SHIP+HAT $270.00 Time Remaining: 17h 24m Buy It Now for only: $270.00 |
 G LOOMIS Model Current Spare Spool 3 4 $145.00 Time Remaining: 17h 21m Buy It Now for only: $145.00 |
 G LOOMIS Model 9 10 Current Fly Reel FREE SHIP+HAT $350.00 Time Remaining: 17h 23m Buy It Now for only: $350.00 |
 G LOOMIS Model 3 4 Current Fly Reel FREE SHIP+HAT $250.00 Time Remaining: 17h 24m Buy It Now for only: $250.00 |
Loomis Model
Corporate Governance - Where'd it go?
Corporate Governance – Where’d It Go?
“An internal system encompassing policies, processes and people, which serves the needs of shareholders and other stakeholders, by directing and controlling management activities with good business savvy, objectivity, accountability and integrity,” is the way Gabrielle O’Donovan defines corporate governance in, “A Board Culture of Corporate Governance.” “Corporate governance is most often viewed as both the structure and the relationships which determine corporate direction and performance,” according to corpgov.net. As you can see, delineating the phenomenon of corporate governance can be an obstacle in it of itself; now just imagine trying to instill a corporate governance policy within a company.
It is possible that the lack of a one unambiguous characterization of corporate governance is the foundation from which fraud has grown from over the past few decades; however, it is truly unlikely. Going back to the end of O’Donovan’s definition of corporate governance, the real growth place of fraud is a lack of objectivity, accountability and integrity within corporations. Corporate governance follows a hierarchical outline, with the Board of Directors at the top, then senior management, followed by internal auditors and finally external entities (Lawrence, Weber, Business and Society 12th Ed.). An organization’s corporate governance policy can only be as strong as its weakest practitioner, and the weakest practitioner can reside in any level of the hierarchy. How and/or why does a corporation’s governance policy fail?
First look at the top, the Board of Directors level. The board is responsible with creating the company’s corporate governance policy, therefore they have no excuse as to why they wouldn’t know or follow the policies. This doesn’t imply that fraud doesn’t exist at the top level in anyway. Members of the Board of Directors of a company take-part in fraudulent activities for numerous reasons. First off, members of the board are voted on, and no qualifications exist. Anyone can be voted into a position of great power within an organization; so in reality, someone unfamiliar with business practices could easily take part in fraudulent activities and not even be aware of it. Another reason deceit is found with the Board of Directors is due to conflicts of interest. Board members, since anyone can be voted in, are sometimes on other company’s Board of Directors, or are sometimes the company’s senior management (Lawrence, Weber, Business and Society 12th Ed.). An example of a conflict of interest for a person who is part of senior management and on the board could be making a business decision that raises the company’s stock price, as the CEO this person is awarded stock options as part of their pay, while that decision did not fit in with the corporation’s governance policy. The person’s lack of integrity allowed them to make an immoral decision to create wealth for him or herself.
Senior management is often to blame as well. A lot can lead a top manager within a company to breaking from the corporate governance policy. Career concerns or pride can foster decisions that a person, under normal conditions, wouldn’t make. For instance, if a manager is given a quota he or she has to reach in a certain time period, the pressure they feel to succeed may allow them to make an unethical decision. If they are under the belief that not reaching that quota is going to cost them their job, anything in the realm of possibilities to keep their job may be done. Another reason top management may look the other way when they know something that the CEO is doing is wrong is because they feel a deep loyalty to them. In the late 1960s, upper-management at Quasar Stellar Company knowingly allowed falsified records to be sent to the parent company, Universal Nucleonics Company, as directed by the CEO. When interviewed, Peter Loomis VP of Marketing said “I always felt that I owe more loyalty to my supervisor that to the company” (Fendrock, “A Crisis in Conscience at Quasar”).
The issue with internal auditors is pretty simple to understand. The people you constantly work with naturally become your friends. An internal auditor reports to the Board of Directors, people whom they rarely see, about the work of the senior management, the people that they work with day in and day out. Thus, a conflict of interest arises – does the internal auditor want to report to the board that management has falsified the reports and risk losing their friend, or do they want to let management get away with what they are doing and inform the board that all is well to keep their friends? It’s a tight line to walk, and sometimes corporate governance takes a backseat to friendship.
External entities, public accountants for example, also have an interest in fraudulent activities within a company. When public accountants audited a company in the past, they often did it for multiple years straight and a relationship formed between the company and public accountant. The relationship could grow, and in addition to auditing the company, the accountant would provide consulting services. The consulting services provided were much more lucrative than the auditing services, so naturally one would one to keep the company as a client for consulting. A conflict of interest presents itself because of this point; if the public accountant finds that the company is falsifying records, the company can threaten to revoke its desire for the consulting services from the accountant if the accountant reports them.
The Sarbanes-Oxley Act of 2002 aimed to prevent this from happening, by including a provision which states that no auditor can also provide consulting services to the corporation in which they are auditing. The act also aimed at placing more blame on senior management with a provision that requires the CEO and CFO to sign off on the authenticity of financial statements. Sarbanes-Oxley also now requires at least one member of the Board of Directors audit committee to be a financial expert. Although the Sarbanes-Oxley Act has improved some of the failures in corporate governance, many complain about its costliness. And as it is easily observed over the past few years, not all failures can be prevented. Businesses need to construct better corporate governance models, and individuals need to instill in themselves a stronger sense of accountability and integrity if the business world wants to see the end of fraudulent activities.
About the Author
G-Loomis Pro Green Series - ICAST 2009 "Best in Show"