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摘要:The review of the capabilities and resources of the corporate governance systems of The Body Shop revealed very little inconsistencies regarding its st......

Introduction

The management system and governance of each and every organisation is accountable for the maintenance of the organisation’s strength and survival in the stiff competition in the business world. The role of the governance imposed by the organisation as a whole should always be open minded for the occurrences of changes in order to adjust and cope with the tremendous development that are happening in the internal and external environment of the organisation. With the constantly changing environment, many people especially those in the working organisation find themselves normally adapting. This is because change can bring many improvement and development in different aspects of competency. In many ways, change can make work easier, pave the way for future innovations or generally improve people’s lives. Similarly, change has been adapted by various work organisations for varied reasons.

Important changes in the understanding and management of corporate governance and its impacts on businesses have been developed in the past 10 to 15 years. Various researchers, practitioners and policymakers now acknowledge that corporate governance and its impacts on businesses can be conceptualised from a functional perspective and that appropriate interventions involve the development of alternative measures to cope up. It was also noted that the establishment of a conducive environment for learning and training as an integral component of corporate governance have served effectively in implementing organisational change strategies for transformation. At present, this philosophical shift has extended to various settings, including multinational companies and organisations. Directors here have recognised that some employees do not have the skills and behavioural repertoires necessary to cope with the many expectations and challenges of corporate governance. Hence, these employees may have the tendency to remain contented with their mediocre performances as their alternative way of mitigating these expectations.

Corporate governance pertains to the set of policies that are established in order to make influence in the manner in which an organisation or company is managed, governed or operated. The execution of corporate governance leads to the efficient and effective implementation of the policies and tasks necessary to satisfy a firm's customers, employees, and management. It also focuses on the careful management of the processes involved in the relationships among all the stakeholders involved (Bhattacharya, 2000).

More often than not, small companies don't really have the capabilities to implement corporate governance. Instead, these companies engage in activities that various schools of management typically associate with the implementation of corporate governance. These activities include the establishment of rules, policies for decision-making, monitoring and evaluation.

However, corporate governance deals with all operations done within companies and organisations. Activities such as the management of responsibilities, the control of operations, logistics and evaluations are often related with corporate governance. A great deal of emphasis lies on the efficiency and effectiveness of processes. Therefore, corporate governance includes the analysis and management of internal processes.

The Body Shop will be the model business entity that will be used in this research based on their history in corporate governance.

Company Background

A known British chain of cosmetic stores called “Body Shop” which is found almost all over the world shows tremendous success in previous years is also the company The Body Shop International plc. Actually, The Body Shop agreed to a £652 million takeover offer by a French cosmetics group L'Oréal on 17 March 2006. The Body Shop was founded by Anita Roddick, distinguished for selling its own line of products not tested on animals, and produced in an ecologically sustainable approach (wikipedia, 2006).

The Body Shop aims for sustainable growth as a broad market leader in cosmetics as well as for segment leadership. In both cases, the brands of The Body Shop will play a crucial part. The Body Shop is able to establish its broad leadership usually by merging with other strong cosmetics companies and their products, which are then combined into a new, larger company. Offering training to its employees, improving the company operations, and the introduction of new beauty products and technologies then reinforces the positions of the various products of The Body Shop. This practically results in economies of scale that is able to create a distribution network for both its local and international products. If a market is already in the control of other companies, The Body Shop devotes its attention towards the development of a premium segment with its various beauty products.

Discussions

Any business organisation fundamentally exists because it has certain responsibilities to fulfil for the people in the community as well as the various entities comprising it. The organisation has its human entity ranging from the staff, to the managers, board of directors, stakeholders, suppliers and so forth. All these groups have their own set of functions that contribute to the determination of the business goals, the delivery mechanisms of goods and services, and the operational patterns within the organisation. Furthermore, business organisations are part of the larger society where the markets and consumers are targeted and derived. The complexity of the internal and external surroundings of the business necessitates crucial deliberations and decisions in order to ensure the effective and continuous affairs of the organisation. The overall management of the internal and external affairs of the organisation is what basically forms corporate governance.

Basic Definitions

1) Corporate Governance - pertains to the set of policies that are established in order to make influence in the manner in which an organisation or company is managed, governed or operated (Bhattacharya, 2000).

2) Company Performance - can be measured in terms of the efficient and effective implementation of the policies and tasks necessary to acquire the essential goods or services at the best possible total cost of ownership, leading to the overall satisfaction of a firm's customers, employees, and management (Booms, 1981).

Role of Executive Directors

Executive directors have the primary role to make specific identifications of all the possible sources of evaluation information which includes company performance. This is because aside from the observations of the immediate supervisors, company performance evaluation information can still come from a variety of other sources, including the employees, subordinates, and work products (Einsestat, 2001). For example, whenever The Body Shop utilises company performance information from individuals other than the immediate supervisor, the management informs the employees of the possible sources at the start of the company performance cycle, where they receive their company performance plans.

In addition, these executive directors are the people who develop their company’s performance plans. The plans are signed by the employees and then passed on to the management for approval. They make sure that company performance plans are complete and adequate before signing the forms (Gonzalez, 2003).

Executive directors also discuss the company performance plans with the employees in a clear and organised manner. Generally, discussions are conducted within 30 days of the start of the company performance cycle.

Role of Non-executive Directors

Non-executive directors document their company’s performance and provide feedback to the executive directors from time to time throughout the company performance cycle. Documentation normally occurs in the form of memos, and these are retained in the non-executive directors’ confidential files.

Actually, these directors also have the authority to determine substandard or unacceptable company performance (Galpin et al. 2002). They normally address minor or marginal company performance issues through company performance counselling and coaching.

The Body Shop’s Corporate Governance

It can be said that the company has a very good framework that has been established in order to deal with different corporate matters. In fact, there is usually a properly structured program that is further reinforced by company policies and other procedures for the proper guidance of the directors in their daily duties. Consequently, the company has a clear reference guide to its business operations and corporate governance. The Board of Directors which oversee the businesses and the decision-making routines as well as the financial aspect of things, keeps watch. In addition, this includes the maintenance of the standards with regards to corporate governance in the corporation’s different sectors.

The Board is made up of ten directors; two are executive while six are non-executive. Because of this, there is a fair division of responsibilities and other tasks among them. And while the non-executive directors are independent from the others, they are still able to contribute their experience and knowledge during Board discussions. Without a doubt, The Board is in-charge of caring for the company’s operations, assets, and its shareholders. All-in-all, the board aims to work with these factors in the hopes of maximising performance. Because of this, it is The Board that is responsible for the finalisation of budgets and strategic plans. And in order to ensure the firm’s competent operations, The Board conducts a monthly review of the company’s businesses in relation to its financial movements.
 

本文标签: 公司治理制度企业管治系统Corporate Go

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