Question

Would the following initiatives improve corporate governance? Can you think of others that would?

a. Require the board of directors to implement shareholder proposals that receive a majority vote

b. Require proxy access

c. Prohibit boards of directors from seating directors who fail to receive a majority vote of shares cast

d. Base compensation on net returns on invested capital 

e. Make say-on-pay votes binding

Answer 1

Corporate governance is all about running a corporate or any business with truth, tranquility, transparency and utmost fairness. The ever increasing industrialization and commercialization gives rise to new companies, which are emerging and extremely important for the prospective growth of the business. It helps in maintaining the corruption free business environment, which will benefit the organization and business world as a whole.

 

The following initiatives improve corporate governance, which would be highly helpful and value add as follows:

 

a. Require the board of directors to implement shareholder proposals that receive a majority vote.

 

c. Prohibit boards of directors from seating directors who fail to receive a majority vote of shares cast.

 

The above mentioned actions really showcase that an organization works with utmost corporate governance. It is also making a trail of blaze for other organizations to work as per the guidelines of corporate governance for the organizations to follow.

 

The other steps to ensure corporate governance in the company could be by motivating and encouraging the employees to provide their inputs and by valuing them. The efficiency of an organization lies in identifying and providing opportunities for the most potential and deserving candidates.