corporate strategy and governance assignment

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Corporate Strategy, Governance Structure and Organization Performance: A Research Agenda

Corporate strategy plays a critical role in the proper functioning of an organization as it provides the blueprint that guides the corporate direction of an organization while governance structure presents an organization with a framework for the distribution of responsibilities and resources to achieve organization performance. While the constructs have been sufficiently studied and documented in various studies separately in relation to organization performance, few studies have been undertaken to study the two constructs together to understand how they jointly explain organization performance. This paper presents a review of the extant theoretical and empirical literature on the two constructs in relation to organization performance. Relevant underpinning theories are reviewed, constructs described and their operational indicators identified and compared with empirical work and emergent knowledge gaps identified. The paper finally proposes a multidisciplinary based theoretical model suitable to address the gaps identified to advance knowledge in the area and calls upon future research to empirically test the propositions of the study.

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• Corporate Finance

Corporate Governance: Definition, Principles, Models, and Examples

Good corporate governance can benefit investors and other stakeholders, while bad governance can lead to scandal and ruin

James Chen, CMT is an expert trader, investment adviser, and global market strategist.

Amanda Bellucco-Chatham is an editor, writer, and fact-checker with years of experience researching personal finance topics. Specialties include general financial planning, career development, lending, retirement, tax preparation, and credit.

Investopedia / Jessica Olah

What Is Corporate Governance?

Corporate governance is the system of rules, practices, and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of a company's many stakeholders , which can include shareholders, senior management, customers, suppliers, lenders, the government, and the community. As such, corporate governance encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure .

Key Takeaways

• Corporate governance is the structure of rules, practices, and processes used to direct and manage a company.
• A company's board of directors is the primary force influencing corporate governance.
• Bad corporate governance can destroy a company's operations and ultimate profitability.

The basic principles of corporate governance are accountability, transparency, fairness, responsibility, and risk management.

Understanding Corporate Governance

Governance refers to the set of rules, controls, policies, and resolutions put in place to direct corporate behavior. A board of directors is pivotal in governance , while proxy advisors and shareholders are important stakeholders who can affect governance.

Communicating a company's corporate governance is a key component of community and  investor relations . For instance, Apple Inc.'s investor relations site profiles its corporate leadership (the executive team and board of directors) and provides information on its committee charters and governance documents, such as bylaws, stock ownership guidelines, and articles of incorporation .

Most successful companies strive to have exemplary corporate governance. For many shareholders, it is not enough for a company to be profitable; it also must demonstrate good corporate citizenship through environmental awareness, ethical behavior, and other sound corporate governance practices.

Benefits of Corporate Governance

• Good corporate governance creates transparent rules and controls, guides leadership, and aligns the interests of shareholders, directors, management, and employees.
• It helps build trust with investors, the community, and public officials.
• Corporate governance can give investors and stakeholders a clear idea of a company's direction and business integrity.
• It promotes long-term financial viability, opportunity, and returns.
• It can facilitate the raising of capital.
• Good corporate governance can translate to rising share prices.
• It can reduce the potential for financial loss, waste, risks, and corruption.
• It is a game plan for resilience and long-term success.

Corporate Governance and the Board of Directors

The board of directors is the primary direct stakeholder influencing corporate governance. Directors are elected by shareholders or appointed by other board members and charged with representing the interests of the company's shareholders.

The board is tasked with making important decisions, such as corporate officer appointments, executive compensation, and dividend policy. In some instances, board obligations stretch beyond financial optimization, as when shareholder resolutions call for certain social or environmental concerns to be prioritized.

Boards are often made up of a mix of insiders and independent members. Insiders are generally major shareholders, founders, and executives. Independent directors do not share the ties that insiders have. They are typically chosen for their experience managing or directing other large companies. Independents are considered helpful for governance because they dilute the concentration of power and help align shareholder interests with those of the insiders.

The board of directors must ensure that the company's corporate governance policies incorporate corporate strategy, risk management, accountability, transparency, and ethical business practices.

A board of directors should consist of a diverse group of individuals, including those with matching business knowledge and skills, and others who can bring a fresh perspective from outside the company and industry.

The Principles of Corporate Governance

While there can be as many principles as a company believes make sense, some of the most common ones are:

• Fairness : The board of directors must treat shareholders, employees, vendors, and communities fairly and with equal consideration.
• Transparency : The board should provide timely, accurate, and clear information about such things as financial performance, conflicts of interest, and risks to shareholders and other stakeholders.
• Risk Management : The board and management must determine risks of all kinds and how best to control them. They must act on those recommendations to manage risks and inform all relevant parties about the existence and status of risks.
• Responsibility : The board is responsible for the oversight of corporate matters and management activities. It must be aware of and support the successful, ongoing performance of the company. Part of its responsibility is to recruit and hire a chief executive officer (CEO) . It must act in the best interests of a company and its investors.
• Accountability : The board must explain the purpose of a company's activities and the results of its conduct. It and company leadership are accountable for the assessment of a company's capacity, potential, and performance. It must communicate issues of importance to shareholders.

Corporate Governance Models

Different corporate governance models may be found throughout the world. Here are a few of them.

The Anglo-American Model

This model can take various forms, such as the Shareholder, Stewardship, and Political Models. The Shareholder Model is the principal model at present.

The Shareholder Model is designed so that the board of directors and shareholders are in control. Stakeholders such as vendors and employees, though acknowledged, lack control.

Management is tasked with running the company in a way that maximizes shareholder interest. Importantly, proper incentives should be made available to align management behavior with the goals of shareholders/owners.

The model accounts for the fact that shareholders provide the company with funds and may withdraw that support if dissatisfied. This is supposed to keep management working effectively.

The board will usually consist of both insiders and independent members. Although traditionally, the board chairperson and the CEO can be the same, this model seeks to have two different people hold those roles.

The success of this corporate governance model depends on ongoing communications among the board, company management, and the shareholders. Important issues are brought to shareholders' attention. Important decisions that need to be made are put to shareholders for a vote.

U.S. regulatory authorities tend to support shareholders over boards and executive management.

The Continental Model

Two groups represent the controlling authority under the Continental Model. They are the supervisory board and the management board.

In this two-tiered system, the management board is composed of company insiders, such as its executives. The supervisory board is made up of outsiders, such as shareholders and union representatives. Banks with stakes in a company also could have representatives on the supervisory board.

The two boards remain entirely separate. The size of the supervisory board is determined by a country's laws and can't be changed by shareholders.

National interests have a strong influence on corporations with this model of corporate governance. Companies can be expected to align with government objectives.

This model also greatly values the engagement of stakeholders, as they can support and strengthen a company's continued operations.

The Japanese Model

The key players in the Japanese Model of corporate governance are banks, affiliated entities, major shareholders called Keiretsu (who may be invested in common companies or have trading relationships), management, and the government. Smaller, independent, individual shareholders have no role or voice. Together, these key players establish and control corporate governance.

The board of directors is usually made up of insiders, including company executives. Keiretsu may remove directors from the board if profits wane.

The government affects the activities of corporate management via its regulations and policies.

In this model, corporate transparency is less likely because of the concentration of power and the focus on the interests of those with that power.

How to Assess Corporate Governance

As an investor, you want to select companies that practice good corporate governance in the hope that you can thereby avoid losses and other negative consequences such as bankruptcy.

You can research certain areas of a company to determine whether or not it's practicing good corporate governance. These areas include:

• Disclosure practices
• Executive compensation structure (whether it's tied only to performance or also to other metrics)
• Risk management (the checks and balances on decision-making)
• Policies and procedures for reconciling conflicts of interest (how the company approaches business decisions that might conflict with its mission statement)
• The members of the board of directors (their stake in profits or conflicting interests)
• Contractual and social obligations (how a company approaches issues such as climate change)
• Relationships with vendors
• Complaints received from shareholders and how they were addressed
• Audits (the frequency of internal and external audits and how any issues that those audits raised have been handled)

Types of bad governance practices include:

• Companies that do not cooperate sufficiently with auditors or do not select auditors with the appropriate scale, resulting in the publication of spurious or noncompliant financial documents
• Executive compensation packages that fail to create an optimal incentive for corporate officers
• Poorly structured boards that make it too difficult for shareholders to oust ineffective incumbents.

Examples of Corporate Governance: Bad and Good

Bad corporate governance can cast doubt on a company's reliability, integrity, or obligation to shareholders. All can have implications for the financial health of the business.

Volkswagen AG

Tolerance or support of illegal activities can create scandals like the one that rocked Volkswagen AG starting in September 2015. The details of "Dieselgate" (as the affair came to be known) revealed that for years, the automaker had deliberately and systematically rigged engine emission equipment in its cars to manipulate pollution test results in the U.S. and Europe.

Volkswagen saw its stock shed nearly half its value in the days following the start of the scandal. Its global sales in the first full month following the news fell 4.5%.

VW's board structure facilitated the emissions rigging and was a reason it wasn't caught earlier. In contrast to a one-tier board system common to most U.S. companies, VW had a two-tier board system consisting of a management board and a supervisory board, in keeping with the Continental Model of corporate governance.

The supervisory board was meant to monitor management and approve corporate decisions. However, it lacked the independence and authority to carry out these roles appropriately.

The supervisory board included a large portion of shareholders. Ninety percent of shareholder voting rights were controlled by members of the board. There was no real independent supervisor. As a result, shareholders were in control and negated the purpose of the supervisory board, which was to oversee management and employees, and how they operated. This allowed the rigged emissions to occur.

Public and government concern about corporate governance tends to wax and wane. Often, however, highly publicized revelations of corporate malfeasance revive interest in the subject.

For example, corporate governance became a pressing issue in the United States at the turn of the 21st century, after fraudulent practices bankrupted high-profile companies such as Enron and WorldCom .

The problem with Enron was that its board of directors waived many rules related to conflicts of interest by allowing the chief financial officer (CFO) , Andrew Fastow, to create independent, private partnerships to do business with Enron.

These private partnerships were used to hide Enron's debts and liabilities. If they'd been accounted for properly, they would have reduced the company's profits significantly.

Enron's lack of corporate governance allowed the creation of the entities that hid the losses. The company also employed dishonest people, from Fastow down to its traders, who made illegal moves in the markets.

The Enron scandal and others in the same period resulted in the 2002 passage of the Sarbanes-Oxley Act . It imposed more stringent recordkeeping requirements on companies and stiff criminal penalties for violating them and other securities laws. The aim was to restore confidence in public companies and how they operate.

It's common to hear examples of bad corporate governance. In fact, it's often why companies end up in the news. You rarely hear about companies with good corporate governance because their corporate guiding policies keep them out of trouble.

One company that seems to have consistently practiced good corporate governance, and adapts or updates it often, is PepsiCo. In drafting its 2020 proxy statement, PepsiCo sought input from investors in six areas:

• Board composition, diversity, and refreshment, plus leadership structure
• Long-term strategy, corporate purpose, and sustainability issues
• Good governance practices and ethical corporate culture
• Human capital management
• Compensation discussion and analysis
• Shareholder and stakeholder engagement

The company included in its proxy statement a graphic of its current leadership structure. It showed a combined chair and CEO along with an independent presiding director and a link between the company's "Winning With Purpose" vision and changes to the executive compensation program.

What Are the 4 Ps of Corporate Governance?

The four P's of corporate governance are people, process, performance, and purpose.

Why Is Corporate Governance Important?

Corporate governance is important because it creates a system of rules and practices that determines how a company operates and how it aligns with the interest of all its stakeholders. Good corporate governance fosters ethical business practices, which lead to financial viability. In turn, that can attract investors.

What Are the Basic Principles of Corporate Governance?

The bottom line.

Corporate governance consists of the guiding principles that a company puts in place to direct all of its operations, from compensation, risk management, and employee treatment to reporting unfair practices, dealing with the impact on the climate, and more.

Corporate governance that calls for upstanding, transparent behavior can lead a company to make ethical decisions that will benefit all of its stakeholders, including investors. Bad corporate governance can lead to the breakdown of a company, often resulting in scandal and bankruptcy.

Apple. " Investor Relations. Leadership and Governance ."

BBC. " Scandal Cuts VW Sales by 4.5% This Year ."

Dibra, Rezart. " Corporate Governance Failure: The Case of Enron and Parmalat ." European Scientific Journal , vol.12, no. 16, June 2016, pp. 283-290.

Corporate Secretary. " PepsiCo Finds Governance Success Through Evolution ."

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Corporate Strategy And Governance

University: Blackburn College

• Level: Post Graduate/University
• Pages: 18 / Words 4471
• Paper Type: Assignment
• Course Code:
• Downloads: 12708

This assessment will cover the following questions:

• Overview of research
• Elaborating corporate governance policies and practices
• Explaining the action plan

Chapter 1: INTRODUCTION

1.1 overview of research.

An issue related to the corporate governance is a term that describe the mutual balance between the participants in the organization. There are different participants interested towards the business operations and functions such as shareholders, community staff member and executive staff etc.(Werani, 2018). A Corporate governance practices directly impact on the business profit and reputation of the organization and having the poor policies that can expose the firms to loss of capital investment, reputation damage etc. This research mainly defined concept of corporate governance and its role in maintaining relationship among workers.

1.2 Overview of organisation

Marks and Spencer is a famous British multinational retailer that came into existence in middle of 1884. It was established by Sir Michael Marks and Thomas Spencer. This retailer company in UK is listed one of the biggest brand which has run more than 980 stores in near about 57 countries, in London Stock Exchange. But from last performances, it has analyzed that M&S faces some issues related to retain interest of its stakeholders within business. It is arisen due to costly restructuring the corporate strategy for maintaining sustainability at marketplace. This led management of M&S to think twice on decision-making process which are concerning mainly upon future (M&S still feeling the heat as winter approaches,2019). Any such type of decisions and CG policies are majorly depended on whether this firm is able to create changes in business. This would spread various negative rumors about Marks and Spencer which adversely disrupted its image as well.

In this regard, it has been evaluated that every step which is taken by respective firm for restructuring its business went wrong. This would lead to decrease market share of this company more adversely. Along with this, it has also analyzed that idea of restructuring the infrastructure has led M&S to face various issues. It includes near about sixty-two percent fall in profitability of business annually. Due to this issue, respective company also fails to gain interest of stakeholders and their financial support in implementation of further project.

1.3 Problem Statement

Corporate Governance reflects relationship among Board of Directors, Management, Shareholders, Employees and other stakeholders in a company. It deals with the ways by which suppliers or investors who finance in corporations assure themselves, to get high return on their investment (Quinlan and et.al., 2019). The issues of corporate governance will impact on the financial performance of organization and also measure the accountability of different entities in terms of policies, activities and operations. The researcher will find out the strong relationship between the corporate governance practices and impact on the financial performance of organization. In context with Marks and Spencer, as this company faces related to failure of corporate governance. Therefore, this research will help in determining factors that is impacting on following of CG practices of M&S. It will help in taking effective measures to minimize impact and increase profits through CG practices. It also identifies ways by effective CG practices can be implemented within business, by taking consideration the overall interest of stakeholders.

1.4 Research Aim and Objectives

In order to conduct a research, the most essential task for researchers is to formulate proper aims and objectives. The overall result and success of a project depends on both of these aspects. It provides guidelines to research-team related to identify issues and address the main objectives of research. In this regard, main aim and objective of present case study which is based on Corporate Governance of M&S, are described as beneath:

Research Aim

"To investigate the impact of stakeholder relationship on financial performance of business- A study on Marks and Spencer"

Research Objectives

• To identify role of corporate governance policies and practices in an organization
• To determine relationship between stakeholder relationship and financial performance of business
• To recommend how corporate governance policies can be implemented within Marks and Spencer

1.5 Research Question

• What is the role of corporate governance, policies and practices in an organization?
• What is the relationship between stakeholder relationship and financial performance of business?
• How corporate governance policies can be implemented within Marks and Spencer?

1.6 Structure of research

This part describes overall structure of an assignment under which a research is going to be carried out. It provides actions which are needed to be completed by project-makers for improving and increasing effectiveness of a research (Bainbridge, 2016). Therefore, in this regard, structure of present research can be described in following manner:-

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Chapter 1: Introduction- This is the most important part of research which includes overview of project and organisation which is undertaken for the same. It entails main purpose behind conducting an investigation. In addition to this, it also consists specific aims and objectives, on which entire research is based.

Chapter 2: Literature review- Under this part, secondary sources are taken to analyse the perception of different authors and experts, who have already conduct research on same topic. For this purpose, articles, books and journals have been accessed to collect relevant information on chosen case study.

Chapter 3: Research Methodology- This part of research describes methodologies by which project-makers can gather adequate amount of data. It includes primary and secondary sources which helps in collecting specific information in precise manner.

Chapter 4: Critical Data Analysis- It shows a critical discussion on information which has been gathered under primary and secondary research. Here, discussion is made through view point and perception of different authors in critical manner.

Chapter 5: Recommendation and Action Plan- Here, specific suggestions are provided under recommendation part to a company, for resolving its issues. It provides ways by which a corporation like M&S can enhance its reputation and improve its corporate governance policies. Furthermore, it also highlights action plan which is used to conduct entire activities of chosen research.

CHAPTER 2: LITERATURE REVIEW

2.1 role of corporate governance policies and practices.

According to Bainbridge, (2016) corporate governance is the most significantly visited themes in the organizations. It is also managed and control the overall accountability of organization in proper manner.An effective corporate governance has been required the directors that could be maintain the procedure and practices of companies in proper manner. It encompasses that the executive members reporting to the broad members and aware about the daily operation that performed in the organization. On the other hand, Accountability is an essential for corporate governance to divided into the top level and lower level executive in the firm that help for maintain the entire system of checks and balances in effective manner. As per the view of Bainbridge, (2016) all the members of executive board will be having ethical duty in way of making decision which will be based on best interest of stockholders. However, corporation will be having ethical duty in protecting social welfare of others including all stakeholders and greater community as well.

Most of the people believes that companies whether it is large, medium or small establish their business with the help of many stakeholders so that maximum benefits can be availed. Apart from this, reality is that for operating business in an effective manner good governance plays a crucial role because its positive impact can be seen in the performance of an individual working in an organisation. “Corporate Governance” is single handedly a very wider concept and it further plays a crucial role in making policies and practices. Such as it help organisation in making laws based on corporate legislation, securities regulators, decisions of courts, securities laws and policies etc., As a result, following laws will help company with numerous benefits such as high performance of Board of Directors, better managed risks, strong internal controls with accountable management, well monitored and better performance.

In terms of best practice with the help of Corporate Governance, if it is followed effectively than board of directors can identify the gaps in context with ideal qualities employees have with them. Other than this, better training can be provided existing skills and knowledge of employees can be enhanced. Along with this, through Corporate Governance, certain roles and responsibilities of an individual are defined such as role of sub-group of directors committee will include functions like compensation, nominating, audit etc., Another practices which can be undertaken in Corporate Governance is that it helps in evaluating performance so that effective decisions regarding compensation that is required to be given can be made. While operating business there can be many risk that can face by companies so, Corporate Governance helps in making effective risk management plan with the help of establishing strategic leadership. Thus, managers are accountable for managing risk and monitoring the same so that effective decision can be made. Along with this, directors have an overview and show their responsibility of determining short-term as well as long-term goals and possible risk that can be faced by companies.

2.2 Relationship between stakeholder relationship and financial performance of business

According to de Franca, Pereira and Vieira, (2018) the organization is also planning a strategy for acting different role on internally and also select the suitable strategy for growth or development. It is a process and task that involves facts and figure at their workplace for executing stratagem or support to the employee related their job. Sometimes, the organization is planning for strategy related the formulation but its fail for implementing the changes in operations. Stakeholders are the most important part of any organisation as they are having power to impact decision making process within company and ultimately impacting financial performance as well. The relationship of stakeholders are unique in their ability to help firms to get their performance better.

2.3 Strategies can be implemented to improve CG practices in Marks and Spencer

According to Bell, Bryman and Harley, (2018) an organization must be accurately collecting data in the form of report to identify their profits or losses. It makes sure to figure out that those who invest money in the organization. Sometimes, the lack of transparency expose the fines from the regulatory agencies in the organization. Issues and problem arises when corporate governance fails to perform it activities in an effective manner. For instance: with Marks and Spencer, Stakeholders are pulling their hand from the company and this is happening because of re-structuring of M&S as a result, firm ultimately faced huge loss. Therefore, Marks and Spencer, must make strategies for their organisation that can be implemented in order to enhance Corporate Governances within the company. Some of them are explained below for better understanding:

Increase diversity: Marks and Spencer is facing lack of diversity in terms of effective stakeholders and experienced employees. Because of the least interest of Stakeholders, expected sales get down by 1.5 percent large in the sector of clothing. Therefore, it is important that Marks and Spencer includes people who can manage and handle different activities

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Chapter 3: research methodology.

Research methodology will concept that used by researcher for collecting, analyzing and managing the data in appropriate manner. It will be helpful for selecting the suitable information that applicable in research areas.

Primary data- The researcher will use the primary data collection method to collect the data through Questionnaire, conducting interviews etc. This will help in gathering fresh data and information and analysing them through this it will be easy for researcher to attain aims and objectives. Therefore, it can be said that it is a methodology which further used in order to gather data and information that have not been used by any other researcher while doing their research. Thus, it is very applicable in order to have in depth knowledge regarding a specific topic in which investigator wants to master. Henceforth, main advantage of primary research is to come up to a valid conclusion by searching for an effective solutions. In relation with the present research, company will get to know about the issues that firm is facing while operating their business and gaining competitive advancement as well. Furthermore, different kinds of tools and technologies is going to be used such as questionnaire, online and offline surveys, interviews and many more. Thus, some of them are explained below for better understanding:

Interviews (telephonic or face-to-face): This is one of the qualitative method of data collection. Therefore, it is used in order to gather information from large number of population either by telephonic conversation or face-to-face interviews. Furthermore, so as to do the same researcher can use d This kind of research methodology is generally depends upon the capability of researcher and the way he/she influence respondents for extracting data and information. Therefore, in order to conduct this interview conversation it is important that open end questions are being developed which can only last for around 30 minutes. Thus, it can be said that interview method if very effective when researcher wants to gather information in shorter period of time. In relation with interview it is required that effective communication method is being used because it will enable researcher in gathering appropriated information or responses from respondents.

Online Surveys: With the change in course of time, many new methods had evolved and online survey is one of them. In this,, basically information are collected through mail, internet, social media sites etc., so, generally researcher develops open end questions provided with few options so that respondent can choose according to their choices and preferences. Therefore, in this process once respondents gets the questions, answer them and sent it back to researcher. This helps investigator in gathering information without going to respondent personally. But it has some disadvantage as well because there might be a possibility that people may reject to give answers of questionnaires.

Questionnaire: Among all this is the best method of collecting data and information from respondents by formulating a questionnaire. Thus, questions needs to be in a structured manner starting with the understanding and ending with if any recommendation researcher wants to provide on a given topic. In this all data and information are gathered in a speculated time frame.

In relation with this research, project managers o Marks and Spencer will make use of questionnaire by providing well structured questionnaire related to research topics. Along with this, sample size which will be taken for gathering data is around 10 through random sampling.

Secondary data- collection will another method that help for collecting the information or data through articles, journals etc. This will give insight to researcher about the topic moreover, by interpreting case studies relevant information will be collected. For present study, researcher will use both methods to gather data.

Sampling- Sampling will be explained as specific principle that used for selecting the particular members in the population. Researcher will use the 20 employees of M&S to target population and researcher will have no choice of particular study within the population that reach to their conclusion. The researcher will use simple random technique that gives chance of members participating in the research study.

Analyses method- Data analysis method will help for transforming, cleansing and modelling the data with discovering the specific goals and achievements. The researcher will use the thematic data analysis of qualitative method for identifying the multiple approaches, facts and figures etc.

Design- Research design will general plan about the answer in the research questions. It included research method and strategies for analysing and collecting the data in proper manner. It will be divided into two ways such as Exploratory and conclusive.

For further research, Exploratory research will use for determine the nature and problem of research. It will explore the research topic with different level of depths. It will help for researcher determining the design, methodology and data collections. Exploratory method will generally study about the qualitative information and interpretation related to the subject.

Access and Ethics- Ethical consideration will be specified about the important part of research.

• The researcher participants will not be subjected to harm the ethical in any ways.
• It will respect to the dignity of participants in the research subject or topic.
• The researcher should always maintain the privacy and protection of participants and members.
• It ensures that the level of confidentiality maintain in the research data and information.

CHAPTER 4 : RECOMMENDATION AND ACTION PLAN

4.1 recommendation.

As through this research, it has concluded that stakeholder relationship adversely affect the financial performance of a company, both in negative and positive manner. Here, corporate strategy and governance plays an importance role in developing and managing sustainable position of business. It provides a number of ways for serving satisfaction to stakeholders. Therefore, it is recommended to M&S to concern on this factor while developing its corporate-governance. It includes the effective system of rules, processes and practices, through which respected firm can direct and control its operations. In addition to this, CG practices also significantly involves the process of balancing the stakeholders interests. These practices will help in providing proper guidelines or plan to managers for managing and controlling its business operations. Through this process, respective company will gain advantage to fulfil its corporate goals and objectives in effective manner. It will create value of business in international marketplace, which seems to be beneficial for holding interest of stakeholders within business for longer period.

Furthermore, for improving current CG practices to gain competitive advancement and cooperation of stakeholders towards completion of major project, it is recommended to Board of Directors to concern on some main factors. It includes increase diversity at business, prioritize risk management plan, understanding the concept of human resource allocation and more. Since Marks and Spencer mainly faces issues due to lack of diversity in terms of effective stakeholders and experienced employees. Therefore, Marks and Spencer must concern on giving recruitment to high-talented workforce, who are experienced in dealing with national and international customers in their languages. They will help this retailer in providing best customer services and improve its brand image. In addition to this, diversity at workplace enhance productivity of workplace also, by giving high contribution on accomplishment of mentioned goals and objectives.

In addition to this, to gain high commitment of workers and utilise human resource, it is recommended to managers to identify strength and weaknesses of employees on individual basis. This would help in distributing roles and responsibilities to each worker as per their skills and capabilities. In addition to this, managers can also identify requirement of training programs for improving knowledge and reducing skill gap among workers. It will provide job satisfaction under employees and motivate them to work more hard, for providing best services to customers. Through effective human resource allocation, M&S can gain support of workers and staff members in generating idea for retaining loyal customers in business. In addition to this, it also reduce staff turnover rate which helps in decreasing cost of production as well. As experienced and talented workforce will provide high-quality of services. Furthermore, for preventing failure of corporate-governance, it is recommended to M&S to concern on developing risk management plan. It will includes a number of alternative strategies which company can use, in case of failure of any policy. It will also help in estimating future risks and issues which may impact on business negatively. This would help in preparing management plan for responding towards such issues. Therefore, concerning on these factors- human resource allocation, increase diversity and prepare risk management plan, will aid M&S in expanding business in overseas more appropriately.

4.2 Action Plan

This part of research includes entire activities which are required to address issues and attains objectives of a project. It provides a guideline to researchers in what manner they have to perform, for completing each activity in set period of time. In context with present project, which is based on developing policies for improving CG practices of M&S, the major activities are mentioned in given action plan:-

• Bainbridge, S. M., 2016. Revitalizing SEC Rule 14a-8's Ordinary Business Exclusion: Preventing Shareholder Micromanagement by Proposal.Fordham L. Rev.85.p.705.
• Bell, E., Bryman, A. and Harley, B., 2018.Business research methods. Oxford university press.
• de França, J. A., Pereira, C. C. and Vieira, E. T., 2018. Valuation modelling of impairment of nonmonetary assetsin business management: ananalytical proposal for IAS 36.International Journal of Development Research.8(10). pp.23794-23800.
• de Oliveira and et.al., 2018. PROPOLIS PROJECT: DEVELOPMENT OF A SOCIAL BUSINESS MODEL PROPOSAL.Revista Eletrônica de Estratégia & Negócios. 10(3). pp.27-46.
• Klepac, G. and Berg, K. L., 2019. Proposal of analytical model for business problems solving in big data environment. InWeb Services: Concepts, Methodologies, Tools, and Applications (pp. 618-638). IGI Global.
• Nuijten, M. J. and Vis, J., 2018. Economic comments on proposal for a novel cancer drug pricing model.Nature Reviews Clinical Oncology.15(9). p.587.
• Quinlan, C. and et.al., 2019.Business research methods. South Western Cengage.

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Assignment 2 Corporate Governance

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Sawlat Zaman

Anurag Pahuja

This conceptual paper provides an overview of various constituents of good quality of corporate governance. Despite many researchers advocating good governance for ensuring good health of business organizations, a consensus on what constitutes good corporate governance has not been arrived at. This article attempts to bring together various constituents known to affect the quality of corporate governance individually and provides a summary measure known as Corporate Governance Quality Index (CGQI).

Onyekachi Duru

Naheem Mahtab , MD. Nazmul Islam

Corporate governance has become an important topic in transition economies in recent years. Directors, owners and corporate managers have started to realize that there are benefits that can accrue from having a good corporate governance structure. Good corporate governance helps to increase share price and makes it easier to obtain capital. International investors are hesitant to lend money or buy shares in a corporation that does not subscribe to good corporate governance principles. Transparency, independent directors and a separate audit committee are especially important. Some international investors will not seriously consider investing in accompany that does not have these things. Several organizations have popped up in recent years to help adopt and implement good corporate governance principles. This Research paper begins with an overview of some basic corporate governance mechanism the regulation and enforcement relies on the development of an inter-related web of public and private institutions, regulations and rights that underpin the four basic values of corporate governance – transparency, accountability, fairness, and responsibility. Without the guarantee of these institutions, the market-building benefits of good internal corporate governance become tenuous. However, if functioning well, their benefits have far-reaching impact, increasing investor confidence and providing business the legal basis needed to take risk and to grow.

Hetal Jhaveri

IRJET Journal

A cryptocurrency is a digital or virtual currency that uses cryptography for security. Every cryptocurrency has its governance model, according to which it functions and secures its network. However, there are two factors that keep the cryptocurrency secure, i.e., the blockchain technology and consensus algorithm. However, there are issues with blockchain and crypto currency security that should be addressed. Also, if you are investing in popular and trusted cryptocurrencies then you are almost safe from the asset point of view. But what matters is where you store your cryptocurrencies which is important. There are various options like hot wallets, cold wallets, physical wallets to choose from with respect to security. Recently, cryptocurrencies have become the main topics in the financial industry. This paper elaborates different user privacy aspects, technology used for security, benefits, challenges, tips to avoid frauds using cryptocurrencies. Successful attacks on crypto currencies are possible and in action; it is important to understand the ways to save cryptocurrency. Many hackers are trying out new ways to counterfeit the cryptocurrency transaction processes and intending to draw the secured cryptocurrency. But being technologically advanced, it has become a challenge for hackers.

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Corporate Strategy and Governance: Assignment and Guidance Kindle Edition

The following book is an actual assignment specimen developed by GMT that will guide you through the whole assignment process for successfully achieving the subject in Degree level or Level 6: Corporate Strategy and Governance

ATENTION : Please, be aware that using the full content or part of the content of this assignment/book will result in plagiarism and it will be reflected in your submission. However, reference from the book and quotations can be use for the assignment or own resources.

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What’s in a Name? Company Secretary Rebrand Would Elevate Governance

Key position increasingly influences strategic decision-making.

At big corporations, few of the faces around the boardroom meeting table have more first-hand knowledge of the company’s history than the corporate secretary. But if you look at this role as purely administrative, Kuberno’s Jay Dodd argues, you’re missing out. Is it time to think about what’s in a name?

Names can fundamentally change the way we think about things. How an organization describes certain functions is a reflection of the value it attributes to those roles. Who would have known just two decades ago, for example, that positions that emerged in the wake of new regulatory directives would have led to data protection officers in the C-suite of many large corporations today? 

Given the ever-expanding duties that fall under the umbrella of the company secretary, encompassing strategic responsibilities from succession planning to crisis management, and a sharper focus on governance in the round, large corporations in the U.S. and around the world are increasingly realizing that the company secretary is in a key position to influence strategic decision-making and therefore merits greater prominence within their organization.

This growing realization has prompted an emergence of new job titles, such as governance director or chief governance officer. However, this is not simply a question of a change for the sake of change. Instead, this is a means of signaling a new corporate mindset, where companies reaffirm their commitment to the highest possible governance standards.

From note-takers to strategic advisers

The role of the company secretary in times gone by has been mostly limited to largely administrative tasks, such as maintaining the share register and other corporate documents, taking the minutes at board meetings and producing reports for use at annual general meetings (AGMs).

Misconceptions surrounding the company secretary’s role have also persisted thanks in part to a lack of clearly defined responsibilities. In the UK, for instance, the Companies Act , which came into force in 2006, falls short of explicitly specifying the remit of company secretaries. Similarly in the U.S., the company secretary role is often viewed in narrow, administrative terms, with only limited expectations of this being an advisory role.

But in practice, company secretaries occupy a privileged and potentially highly influential position at the intersection of the board and the executive committee, giving them a unique perspective on business operations. They are responsible for advising the board on all governance matters and are also a key point of contact for the chairperson. This level of direct access to senior individuals is unmatched by other roles that exist in large companies and brings with it access to a wealth of knowledge.

In governance terms, large PLCs and multinationals are typically unwieldy beasts, relying on siloed internal structures to get to grips with sprawling worldwide operations. Unlike others in the business, the company secretary is obliged to have a detailed understanding of the full breadth of corporate functions and will therefore spend significant amounts of time getting to know all areas of the business. This allows them to gain a detailed yet strategic view of the entire company in a way their colleagues cannot. This holistic view and deep understanding of how the full suite of a company’s units knits together provides invaluable insights on which to base strategic guidance.

As the composition of boards tends to change more frequently, due to shifting business aims or external shocks, company secretaries will often find they are the longest-serving face in the boardroom. This means they will have the most extensive first-hand experience of the company’s history, with a deep appreciation of how what has gone before might have an impact on the future direction of the business. The company secretary is, therefore, often the voice of stability, steering senior teams through transitions, informed by the wealth of knowledge and experience at their disposal.

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The ‘G’ in ESG

The rapid rise of environment, social and governance (ESG) up the corporate agenda has placed a significantly greater focus on governance-related issues. ESG considerations now feature more heavily in commercial decisions, such as valuations, compelling business leaders to focus more closely on their governance structures. Companies are under additional pressure to demonstrate their governance credentials, not just for ethical reasons but also because this is increasingly beneficial to the bottom line.

To demonstrate how highly they value the governance function as embodied by the company secretary, companies are beginning to embrace roles like governance director as a means of signaling to the market that governance is not just an administrative matter but also a key strategic pillar for their organization.

Some corporations are going further by seeking new ways to streamline some of the administrative duties of company secretaries to ensure they spend less time gathering data and more time harnessing this data to inform the strategic advice they can offer the business.

By publicly acknowledging the value they place on the often forgotten “G” and providing greater support to the governance function, companies also hope to be rewarded with more favorable ESG scores, higher valuations and ultimately increased revenues.

The company secretary of the future

Company secretaries are increasingly thinking beyond what it takes to meet minimum standard requirements on governance and are exploring new ways to run corporate legal entities more effectively. Issues like subsidiary governance frameworks are likely to remain high on their agenda, as large multinationals grapple with how to better understand what is happening at the fringes of their organizations and how to strategically optimize these operations.

The expansion of the company secretary’s role from administrative support to strategic governance necessitates a corresponding rebrand if it is to attract the caliber of applicant and level of internal support that such a wide-ranging and critical role demands. As companies begin to prioritize governance as a strategic pillar to boost their overall business strategy, embracing a rebranded company secretary function will be key to helping businesses both meet their ESG obligations and pursue new strategic opportunities.

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Artificial intelligence in strategy

Can machines automate strategy development? The short answer is no. However, there are numerous aspects of strategists’ work where AI and advanced analytics tools can already bring enormous value. Yuval Atsmon is a senior partner who leads the new McKinsey Center for Strategy Innovation, which studies ways new technologies can augment the timeless principles of strategy. In this episode of the Inside the Strategy Room podcast, he explains how artificial intelligence is already transforming strategy and what’s on the horizon. This is an edited transcript of the discussion. For more conversations on the strategy issues that matter, follow the series on your preferred podcast platform .

Joanna Pachner: What does artificial intelligence mean in the context of strategy?

Yuval Atsmon: When people talk about artificial intelligence, they include everything to do with analytics, automation, and data analysis. Marvin Minsky, the pioneer of artificial intelligence research in the 1960s, talked about AI as a “suitcase word”—a term into which you can stuff whatever you want—and that still seems to be the case. We are comfortable with that because we think companies should use all the capabilities of more traditional analysis while increasing automation in strategy that can free up management or analyst time and, gradually, introducing tools that can augment human thinking.

Joanna Pachner: AI has been embraced by many business functions, but strategy seems to be largely immune to its charms. Why do you think that is?

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Yuval Atsmon: You’re right about the limited adoption. Only 7 percent of respondents to our survey about the use of AI say they use it in strategy or even financial planning, whereas in areas like marketing, supply chain, and service operations, it’s 25 or 30 percent. One reason adoption is lagging is that strategy is one of the most integrative conceptual practices. When executives think about strategy automation, many are looking too far ahead—at AI capabilities that would decide, in place of the business leader, what the right strategy is. They are missing opportunities to use AI in the building blocks of strategy that could significantly improve outcomes.

I like to use the analogy to virtual assistants. Many of us use Alexa or Siri but very few people use these tools to do more than dictate a text message or shut off the lights. We don’t feel comfortable with the technology’s ability to understand the context in more sophisticated applications. AI in strategy is similar: it’s hard for AI to know everything an executive knows, but it can help executives with certain tasks.

When executives think about strategy automation, many are looking too far ahead—at AI deciding the right strategy. They are missing opportunities to use AI in the building blocks of strategy.

Joanna Pachner: What kind of tasks can AI help strategists execute today?

Yuval Atsmon: We talk about six stages of AI development. The earliest is simple analytics, which we refer to as descriptive intelligence. Companies use dashboards for competitive analysis or to study performance in different parts of the business that are automatically updated. Some have interactive capabilities for refinement and testing.

The second level is diagnostic intelligence, which is the ability to look backward at the business and understand root causes and drivers of performance. The level after that is predictive intelligence: being able to anticipate certain scenarios or options and the value of things in the future based on momentum from the past as well as signals picked in the market. Both diagnostics and prediction are areas that AI can greatly improve today. The tools can augment executives’ analysis and become areas where you develop capabilities. For example, on diagnostic intelligence, you can organize your portfolio into segments to understand granularly where performance is coming from and do it in a much more continuous way than analysts could. You can try 20 different ways in an hour versus deploying one hundred analysts to tackle the problem.

Predictive AI is both more difficult and more risky. Executives shouldn’t fully rely on predictive AI, but it provides another systematic viewpoint in the room. Because strategic decisions have significant consequences, a key consideration is to use AI transparently in the sense of understanding why it is making a certain prediction and what extrapolations it is making from which information. You can then assess if you trust the prediction or not. You can even use AI to track the evolution of the assumptions for that prediction.

Those are the levels available today. The next three levels will take time to develop. There are some early examples of AI advising actions for executives’ consideration that would be value-creating based on the analysis. From there, you go to delegating certain decision authority to AI, with constraints and supervision. Eventually, there is the point where fully autonomous AI analyzes and decides with no human interaction.

Because strategic decisions have significant consequences, you need to understand why AI is making a certain prediction and what extrapolations it’s making from which information.

Joanna Pachner: What kind of businesses or industries could gain the greatest benefits from embracing AI at its current level of sophistication?

Yuval Atsmon: Every business probably has some opportunity to use AI more than it does today. The first thing to look at is the availability of data. Do you have performance data that can be organized in a systematic way? Companies that have deep data on their portfolios down to business line, SKU, inventory, and raw ingredients have the biggest opportunities to use machines to gain granular insights that humans could not.

Companies whose strategies rely on a few big decisions with limited data would get less from AI. Likewise, those facing a lot of volatility and vulnerability to external events would benefit less than companies with controlled and systematic portfolios, although they could deploy AI to better predict those external events and identify what they can and cannot control.

Third, the velocity of decisions matters. Most companies develop strategies every three to five years, which then become annual budgets. If you think about strategy in that way, the role of AI is relatively limited other than potentially accelerating analyses that are inputs into the strategy. However, some companies regularly revisit big decisions they made based on assumptions about the world that may have since changed, affecting the projected ROI of initiatives. Such shifts would affect how you deploy talent and executive time, how you spend money and focus sales efforts, and AI can be valuable in guiding that. The value of AI is even bigger when you can make decisions close to the time of deploying resources, because AI can signal that your previous assumptions have changed from when you made your plan.

Joanna Pachner: Can you provide any examples of companies employing AI to address specific strategic challenges?

Yuval Atsmon: Some of the most innovative users of AI, not coincidentally, are AI- and digital-native companies. Some of these companies have seen massive benefits from AI and have increased its usage in other areas of the business. One mobility player adjusts its financial planning based on pricing patterns it observes in the market. Its business has relatively high flexibility to demand but less so to supply, so the company uses AI to continuously signal back when pricing dynamics are trending in a way that would affect profitability or where demand is rising. This allows the company to quickly react to create more capacity because its profitability is highly sensitive to keeping demand and supply in equilibrium.

Joanna Pachner: Given how quickly things change today, doesn’t AI seem to be more a tactical than a strategic tool, providing time-sensitive input on isolated elements of strategy?

Yuval Atsmon: It’s interesting that you make the distinction between strategic and tactical. Of course, every decision can be broken down into smaller ones, and where AI can be affordably used in strategy today is for building blocks of the strategy. It might feel tactical, but it can make a massive difference. One of the world’s leading investment firms, for example, has started to use AI to scan for certain patterns rather than scanning individual companies directly. AI looks for consumer mobile usage that suggests a company’s technology is catching on quickly, giving the firm an opportunity to invest in that company before others do. That created a significant strategic edge for them, even though the tool itself may be relatively tactical.

Joanna Pachner: McKinsey has written a lot about cognitive biases  and social dynamics that can skew decision making. Can AI help with these challenges?

Yuval Atsmon: When we talk to executives about using AI in strategy development, the first reaction we get is, “Those are really big decisions; what if AI gets them wrong?” The first answer is that humans also get them wrong—a lot. [Amos] Tversky, [Daniel] Kahneman, and others have proven that some of those errors are systemic, observable, and predictable. The first thing AI can do is spot situations likely to give rise to biases. For example, imagine that AI is listening in on a strategy session where the CEO proposes something and everyone says “Aye” without debate and discussion. AI could inform the room, “We might have a sunflower bias here,” which could trigger more conversation and remind the CEO that it’s in their own interest to encourage some devil’s advocacy.

We also often see confirmation bias, where people focus their analysis on proving the wisdom of what they already want to do, as opposed to looking for a fact-based reality. Just having AI perform a default analysis that doesn’t aim to satisfy the boss is useful, and the team can then try to understand why that is different than the management hypothesis, triggering a much richer debate.

In terms of social dynamics, agency problems can create conflicts of interest. Every business unit [BU] leader thinks that their BU should get the most resources and will deliver the most value, or at least they feel they should advocate for their business. AI provides a neutral way based on systematic data to manage those debates. It’s also useful for executives with decision authority, since we all know that short-term pressures and the need to make the quarterly and annual numbers lead people to make different decisions on the 31st of December than they do on January 1st or October 1st. Like the story of Ulysses and the sirens, you can use AI to remind you that you wanted something different three months earlier. The CEO still decides; AI can just provide that extra nudge.

Joanna Pachner: It’s like you have Spock next to you, who is dispassionate and purely analytical.

Yuval Atsmon: That is not a bad analogy—for Star Trek fans anyway.

Joanna Pachner: Do you have a favorite application of AI in strategy?

Yuval Atsmon: I have worked a lot on resource allocation, and one of the challenges, which we call the hockey stick phenomenon, is that executives are always overly optimistic about what will happen. They know that resource allocation will inevitably be defined by what you believe about the future, not necessarily by past performance. AI can provide an objective prediction of performance starting from a default momentum case: based on everything that happened in the past and some indicators about the future, what is the forecast of performance if we do nothing? This is before we say, “But I will hire these people and develop this new product and improve my marketing”— things that every executive thinks will help them overdeliver relative to the past. The neutral momentum case, which AI can calculate in a cold, Spock-like manner, can change the dynamics of the resource allocation discussion. It’s a form of predictive intelligence accessible today and while it’s not meant to be definitive, it provides a basis for better decisions.

Joanna Pachner: Do you see access to technology talent as one of the obstacles to the adoption of AI in strategy, especially at large companies?

Yuval Atsmon: I would make a distinction. If you mean machine-learning and data science talent or software engineers who build the digital tools, they are definitely not easy to get. However, companies can increasingly use platforms that provide access to AI tools and require less from individual companies. Also, this domain of strategy is exciting—it’s cutting-edge, so it’s probably easier to get technology talent for that than it might be for manufacturing work.

The bigger challenge, ironically, is finding strategists or people with business expertise to contribute to the effort. You will not solve strategy problems with AI without the involvement of people who understand the customer experience and what you are trying to achieve. Those who know best, like senior executives, don’t have time to be product managers for the AI team. An even bigger constraint is that, in some cases, you are asking people to get involved in an initiative that may make their jobs less important. There could be plenty of opportunities for incorpo­rating AI into existing jobs, but it’s something companies need to reflect on. The best approach may be to create a digital factory where a different team tests and builds AI applications, with oversight from senior stakeholders.

The big challenge is finding strategists to contribute to the AI effort. You are asking people to get involved in an initiative that may make their jobs less important.

Joanna Pachner: Do you think this worry about job security and the potential that AI will automate strategy is realistic?

Yuval Atsmon: The question of whether AI will replace human judgment and put humanity out of its job is a big one that I would leave for other experts.

The pertinent question is shorter-term automation. Because of its complexity, strategy would be one of the later domains to be affected by automation, but we are seeing it in many other domains. However, the trend for more than two hundred years has been that automation creates new jobs, although ones requiring different skills. That doesn’t take away the fear some people have of a machine exposing their mistakes or doing their job better than they do it.

Joanna Pachner: We recently published an article about strategic courage in an age of volatility  that talked about three types of edge business leaders need to develop. One of them is an edge in insights. Do you think AI has a role to play in furnishing a proprietary insight edge?

Yuval Atsmon: One of the challenges most strategists face is the overwhelming complexity of the world we operate in—the number of unknowns, the information overload. At one level, it may seem that AI will provide another layer of complexity. In reality, it can be a sharp knife that cuts through some of the clutter. The question to ask is, Can AI simplify my life by giving me sharper, more timely insights more easily?

Joanna Pachner: You have been working in strategy for a long time. What sparked your interest in exploring this intersection of strategy and new technology?

Yuval Atsmon: I have always been intrigued by things at the boundaries of what seems possible. Science fiction writer Arthur C. Clarke’s second law is that to discover the limits of the possible, you have to venture a little past them into the impossible, and I find that particularly alluring in this arena.

AI in strategy is in very nascent stages but could be very consequential for companies and for the profession. For a top executive, strategic decisions are the biggest way to influence the business, other than maybe building the top team, and it is amazing how little technology is leveraged in that process today. It’s conceivable that competitive advantage will increasingly rest in having executives who know how to apply AI well. In some domains, like investment, that is already happening, and the difference in returns can be staggering. I find helping companies be part of that evolution very exciting.

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ACGA Open Letter: Strategic Shareholdings in Corporate Japan

Amar Gill is a Secretary General at Asian Corporate Governance Association and Kei Okamura is a Portfolio Manager at Neuberger Berman and ACGA Japan Working Group Chair. This post is based on an open letter by the Asian Corporate Governance Association (ACGA), prepared by Mr. Gill and Mr. Okamura, with support from Jane Moir.

The Asian Corporate Governance Association (ACGA) recently formed a working group of members and other interested investors to discuss the issue of Japanese companies’ so-called “strategic shareholdings” that include allegiant and cross-shareholdings. We are writing to share our thoughts and suggestions on this topic.

In recent years, Japanese companies have embarked on a number of landmark reforms to improve corporate value over the medium to long term, which global investors attribute as one of the key catalysts driving the Japanese stock market’s strong performance of late. Sound resource allocation by corporates is key to the revival of the Japanese economy and is expected to benefit all stakeholders including employees, customers and shareholders. ACGA and its undersigned members thus look forward to constructive discussions around this topic.

One of the most entrenched areas, however, is the so-called “strategic shareholdings” also known as “allegiant shareholdings”. [1] These often exist to form business relationships between group companies and their suppliers as well as customers and has often been criticized as an inefficient use of capital, an inhibitor of corporate reforms and at times a source of anti-competitive behaviour by businesses. [2] While there has been some divestments of strategic holdings by companies and more recently the reported guidance by Japan’s Financial Services Agency (FSA) to general insurance companies to provide plans to divest these shares, the progress on unwinding these investments has been slow, particularly outside of the financial sector.

Hence, ACGA and its undersigned members are issuing this letter to underscore the need to accelerate the further reduction of these shareholdings, which we believe in principle should be zero for most companies . In this letter, we provide key recommendations on divestment of strategic shareholdings in a manner that would advance governance practices and help companies achieve sustainable long-term growth. Please see pages 6-8 for our recommendations.

Background and historical context

Strategic shareholdings among Japanese companies proliferated amid the post-World War II redevelopment when firms faced two key events. First, during the 1945 to 1952 Allied occupation, the industrial conglomerates, also known as Zaibatsu , were dismantled. Stocks held by group families and companies were expropriated and redistributed to the general public, thus dramatically increasing individual shareholders participation in Japan’s equity market. [3] This, however, caused alarm among company management that viewed the new shareholder base could interfere with the running of their businesses. Second, the economic recession that ensued following the 1953 Korean War created difficult business conditions for many firms; management thus sought financial support to help shoreup weak balance sheets.

The combination of management concern over control and the need for capital allowed Japanese banks to expand their domestic lending business by acquiring shares of key clients and deepening capital ties in exchange for banking relationships. [4] Today’s strategic shareholdings can be seen as resulting from these circumstances. These capital tie-ups continued to expand especially among the so-called Keiretsu industrial and commerce groups that spearheaded Japan’s rapid economic growth into the late 1980s. [5]

Following the bursting of the economic bubble in the early 1990s and over the so-called “Lost Decades” of deflation that followed, the material weaknesses of the interlocking capital alliances became apparent. Plummeting stock prices caused significant impairment losses especially in the financial sector. [6] Thus began the gradual unwinding process in the mid-1990s as businesses and banks started to sell-down their strategic holdings. [7] The action of various financial groups and certain other companies to initiate reducing their strategic investments is commendable, reducing the drag of these investments on governance and Return on Equity (ROE).

Although this trend has continued over the past 20 years, the pace of decline has been gradual. By the data from Topix 500 companies’ annual securities reports ( Yukashoken Hokokusho , below “Yuho”), between fiscal year-end March 2015 to 2023, of the 500 biggest companies listed on the Topix index, the simple average of strategic shareholdings has declined from 13.5% to 8.4% of net asset value. However, as at the end of March 2023, 320 companies, or 64% of the Topix 500 constituents, had strategic shareholdings up to 10% of their net asset value while 140 companies, or 28% of constituents, had over 10% of their net asset value in strategic shareholdings.

Economic implications

In our view, strategic shareholdings can have a detrimental impact on companies’ capital efficiency. According to Glass Lewis’ research, the proxy advisor firm found that the average 5-year ROE of Topix 500 listed companies fell as the ratio of strategic investments to net assets grew, which we believe is a result of the capital tied-up in strategic shareholdings weighing on the equity component of ROE and thus ultimately reducing the firms’ overall capital efficiency. It is worth noting that analysis conducted by the Tokyo Stock Exchange (TSE) found that the same group of Topix 500 companies had a disproportionately higher ratio of companies with ROE below 8% compared to global peers such as the US S&P500 and Europe’s STOXX600 members, indicating that this unique Japanese capital alliance structure may have contributed to inferior capital returns vis-à-vis global firms that do not generally have these structures. [8]

Governance concerns

Poor financial performance can persist for extended periods at companies that have a high level of strategic shareholders. These friendly shareholders may well have a tacit understanding that they will be aligned with management and vice-versa if there is a cross holding of shares. The result is that there can be a significant block of shareholding, represented by these strategic interests, that will generally not vote against management despite the poor performance. Moreover, when companies continue to see lackluster financial results, investors expect independent directors to play a mitigating role to help management address these issues to ultimately raise corporate value. However, if independent directors hail from the strategic investor, including individuals who have recently retired from the investor firm, this may lead to a conflict of interest between the strategic investor and other minority shareholders where the independent director may prioritize the commercial interest of the strategic investor over other minority shareholders

The questionable corporate governance of companies with strategic shareholdings not surprisingly leads to recommendations by proxy advisors to vote against election of directors, with investors voting similarly by their own policies. Last year, across the wider market of the Topix Prime Market of over 1,600 companies, Glass Lewis recommended voting action against the Chairman of the Board of 12.1% of companies and almost 15% of other companies in the non-Prime segments where they held strategic investments equivalent to 10% or more of consolidated net assets. Meanwhile Institutional Shareholder Services (ISS) set a higher threshold of strategic assets at 20% or more of net assets to trigger a recommendation to vote against top executives, usually the President or alternatively the Chairman of the company or a representative director.

Anti-competitive concerns of strategic shareholdings

Another concerning aspect of strategic shareholdings is the impact on competitive behaviour. Companies with strategic equity interests in their customers, and vice versa customers that have strategic equity holdings in their suppliers, are likely to favour these companies in their day-to-day business arrangements. Competitors are thus kept out of these contracts even if they may provide better terms. [9] This anti-competitive behaviour may be negative on shareholder value in not pursuing the best terms from the most efficient suppliers; it is also pernicious on progress of reforms in the relevant sectors and for the economy overall.

In the insurance sector, for instance, the FSA alleged price fixing between general insurance companies citing that the strategic shareholdings contributed to anti-competitive behaviour and ordered the companies to accelerate the unwinding of the holdings. To note, these four insurers are reported to hold 5,900 such investments equivalent to ¥6.5 trillion (US$43 billion, as of February 2024) [10] . Since then, the involved companies have published business improvement plans including targets to reduce the strategic investments to zero over the next several years.

These anti-competitive implications underscore that good corporate governance, including transparent shareholding structures, are essential to foster healthy competition in the relevant sectors and sustained economic growth for the country. Hence it is incumbent on regulators to continue to pursue the unwinding of these strategic shareholdings across the various sectors in the interest of economic efficiency.

Positive regulatory developments

Over the past decade Japanese regulators have addressed this issue through various initiatives such as the Corporate Governance Code that seeks companies to disclose policies on reducing these holdings and an assessment on the benefits and risks of maintaining these investments from a capital efficiency standpoint. [11]

New rules were introduced through a Cabinet Office Ordinance that became effective on 31 January 2019. [12] Strategic shareholding disclosures were enhanced in the Yuho for financial years ending on or after March 2019. These changes form the basis for the disclosure we see today, which increased the number of strategic shareholdings required to be disclosed from the largest 30 to the top 60. The Yuho complements the more qualitative disclosure required in the separate Corporate Governance Reports of companies as mandated by the Corporate Governance Code.

We believe such efforts, including the voting action by investors, have been instrumental in reducing these holdings. The latest “Shareownership Survey” from the Japan Exchange Group (JPX) for fiscal year to March 2023 shows the ownership share of financial institutions in other listed companies falling from a high of around 40% of market capitalisation in the mid-1980s to just 7% by the end of March 2023. [13]

ACGA and investor member recommendations

Given the concerns above, ACGA and the undersigned investors would like through this letter to make some recommendations for advancing the governance of companies with strategic investments. We believe these recommendations will help to improve governance and financial returns of the relevant companies and will be positive for the overall economy. Our recommendations are highlighted below.

1. Policy and implementation

ACGA recommends a general policy of no (zero percent) strategic share holdings . To achieve that end, companies that have strategic shareholdings should adhere to the Corporate Governance Code Principle 1.4 [14] and set clear reduction targets appropriate for each company respectively. Reduction of strategic investments should not be through reclassifying these investments as “pure investments”. Indeed, unless a company is an investment holding company, we recommend as a policy that it should not have any company’s securities held as “pure investments”. Instead, the reduction of such investments should be done in the context of maximizing shareholder value and as part of a comprehensive effort to improve corporate governance and capital returns. In cases where the unwinding of strategic shareholdings could potentially impact the supply and demand dynamics of shares trading in the market, we urge companies to take appropriate measures to minimize the negative fallout to existing shareholders.

2. Governance

In keeping with Japan’s Corporate Governance Code Principle 1.4 on Cross Shareholdings, ACGA recommends the board of directors and audit board members play a stronger role in the oversight of strategic shareholdings so as to implement the Principles of the Code more effectively. In cases where a company holds significant strategic shareholdings (for example more than 5% of net assets), [15] we would encourage companies to establish a committee of independent directors and audit board members ( Kansayaku ) tasked with reviewing such shareholdings, the plans to divest and how reduction targets will be achieved, as well as the use of proceeds within a specific timeframe.

We also recommend that the internal audit department of an issuer be responsible for vetting all contracts and business relationships with investee companies to determine any explicit or implicit agreements between the parties that could give rise to an inference that these shares are being held for strategic purposes by the other party or could give rise to a conflict of interest by virtue of strategic shareholdings. Internal audit should report directly to the committee of independent directors and audit board members ( Kansayaku ) on this matter, and this committee should scrutinize whether these contracts have been conducted on an arms’ length basis and have followed the issuer’s tender process.

3.1 Disclosure on policy

ACGA recommends improved disclosure on the state of strategic shareholdings . In accordance with the Cabinet Office Ordinance on Disclosure of Corporate Affairs, we reiterate the need for listed companies to provide shareholders with specific and more detailed disclosure in the Yuho of the rationale for strategic shareholdings. Additional to the current requirements, we recommend issuers disclose the existence of any current and historical agreements, either explicit or implicit, with the investee company , to exercise its voting rights, confer a benefit or provide any other support to the investee company and its officers in exchange for investee company’s holding issuer’s shares. The exact nature of any such arrangement should be set out in full, including any vendor/purchaser relationship, services contract, or any other relationship (financial or otherwise), and should indicate its length of existence and how it benefits the company and its shareholders. There should be a declaration by the issuer that any holdings of an entity with which it has such a relationship do not give rise to any conflicts of interest, or potential conflicts of interest, or any inference of undue influence being exerted on the investee company and its officers. If there is no such agreement, or has not been any explicit or implicit, the issuer should be required to make a declaration to that effect in the Yuho in respect of each investment holding.

There should be a declaration by issuers to their shareholders who they know, or reasonably believe, to be holding their stock on a strategic basis, that any divestment by the counterpart would not be met by a loss of benefit or detriment to the shareholder . This would include the loss of any contract, business relationship or any explicit or implicit understanding between the parties. We recommend that this declaration by investee companies be required by the TSE to be provided in the Corporate Governance Report so that it can be made available to all shareholders by the next reporting period.

3.2 Disclosure on governance

ACGA recommends company boards should provide disclosure on how they oversee the strategic shareholding investments , how they raise awareness within business units of appropriate policies in relation to investee companies, and to frame board discussions of strategic investments in context of ROE, return on invested capital (ROIC) and weighted average cost of capital (WACC), and how these factors are represented in key performance indicators (KPIs) of senior management of investor companies and their compensation. This disclosure should be made in relation to the TSE’s March 2023 announced “ Action on Cost of Capital-Conscious Management and Other Requests ”.

In accordance with the Corporate Governance Code Principle 1.4, companies should have a voting policy and disclose how they vote their strategic shareholdings , including disclosure at the individual investee company and resolution level with the rationale for the vote. This is similar to the required disclosure for institutional shareholders and is good practice for transparency on how the fiduciary responsibility as a shareholder is being exercised. We encourage companies, while they have strategic share holdings, to adopt the relevant provisions of the Stewardship Code and to state this in their Corporate Governance Report. We recommend that the TSE consider to incorporate this into the Corporate Governance Code.

Companies that have sound reasons to maintain strategic shareholdings which they do not plan to reduce should be encouraged to sign the Stewardship Code, just as institutional shareholders do. The Stewardship Code should apply to all relevant shareholders who have a fiduciary responsibility: the vote of the strategic investors is as relevant, if not more so, than voting of institutional shareholders most of whom have much smaller investments in the companies. The engagement efforts and voting action of investors may be less effective if the larger strategic investors in the companies vote aligned to management, do not exercise their fiduciary responsibility and are not required to make similar disclosures as institutional investors. Regulators may thus consider extending the Stewardship Code to companies that have strategic investments as well.

We reiterate that full and transparent disclosures on strategic shareholders is crucial for all shareholders to determine if the board has exercised its oversight role appropriately and thus should be disclosed prior to the AGM to guide shareholders in their decisions on key proposals including the election of board members.

3.3 Disclosure on capital management

ACGA recommends companies undertaking divestment of their strategic investments should articulate their plans for the proceeds from these divestments . We would encourage companies to make this disclosure as part of its Action Plan in response to the TSE’s cost of capital guidelines. Unless a divesting company has good use for the proceeds for specific investments that generate ROE and ROIC higher than WACC, companies should generally return proceeds of divestments to shareholders in the form of special dividends and/or share repurchases when appropriate. Indeed, having these investments with low returns on the balance sheet shift to holding cash from their divestments would not lead to material improvement in ROE. Companies should thus avoid substantial increases in cash and/or financial securities resulting from these divestments.

We trust this letter and our recommendations will prove constructive in helping to enhance governance practices and shareholder value in corporate Japan. ACGA and the undersigned members look forward to discussing these issues further with you.

1 In this open letter, we will refer to “strategic investments” in reference to allegiant and cross-shareholdings among companies. (go back)

2 “Opinion Summaries Received from Investors in Response to Listed Company Corporate Governance Questionnaire for Investor”, Tokyo Stock Exchange, August 26th, 2008, <https://www.jpx.co.jp/english/equities/improvements/general/tvdivq0000004iib-att/opinions_summary.pdf>. (go back)

3 Mark Scher, “Bank-firm Cross-shareholding in Japan: What is it, why does it matter, is it winding down?”, DESA Discussion Paper, February 2001, <https://www.un.org/esa/desa/papers/2001/esa01dp15.pdf> (go back)

4 Chisato Haganuma, “Reduction of strategic investments in focus” (translated title), Mitsubishi UFJ Trust Bank, March 2021, <https://www.tr.mufg.jp/houjin/jutaku/pdf/u202103_1.pdf> (go back)

5 Mark Scher, “Bank-firm Cross-shareholding in Japan: What is it, why does it matter, is it winding down?”, DESA Discussion Paper, February 2001, <https://www.un.org/esa/desa/papers/2001/esa01dp15.pdf> (go back)

6 Federal Reserve Bank of San Francisco, “Japan’s cross-shareholding legacy: the financial impact on banks”, Country Analysis Unit, Asia Focus, August 2009, <https://www.frbsf.org/banking/wp-content/uploads/sites/5/August-2009-JapansCross-Shareholding-Legacy-the-Financial-Impact-on-Banks-august-09-FINAL.pdf> (go back)

7 Ibid. (go back)

8 ”TSE’s Recent Initiatives on Corporate Governance”, Tokyo Stock Exchange, April 2023, <https://www.fsa.go.jp/en/refer/councils/follow-up/material/20230419-03.pdf>. (go back)

9 Mark Scher, “Bank-firm Cross-shareholding in Japan: What is it, why does it matter, is it winding down?”, DESA Discussion Paper, February 2001, <https://www.un.org/esa/desa/papers/2001/esa01dp15.pdf> (go back)

10 Sora Kitajima and Takanobu Aimatsu, “Japan tells casualty insurers to unwind cross-holdings amid scandal”, Nikkei Asia Review, February 10th, 2024, <https://asia.nikkei.com/Business/Insurance/Japan-tells-casualty-insurers-to-unwind-crossholdings-amid-scandal> (go back)

11 Japan’s Corporate Governance Code Principle 1.4: Cross Shareholdings. “When companies hold shares of other listed companies as cross-shareholdings, they should disclose their policy with respect to doing so, including their policies regarding the reduction of cross-shareholdings. In addition, the board should annually assess whether or not to hold each individual cross-shareholding, specifically examining whether the purpose is appropriate and whether the benefits and risks from each holding cover the company’s cost of capital. The results of this assessment should be disclosed. Companies should establish and disclose specific standards with respect to the voting rights as to their cross-shareholdings, and vote in accordance with the standards.” (Japan’s Corporate Governance Code, Tokyo Stock Exchange, June 11th, 2021 (revised)) (go back)

12 “Corporate Governance Overview 2019”, KPMG, November 2019, <https://assets.kpmg.com/content/dam/kpmg/jp/pdf/2020/jp-en-corporate-governance-overview-2019.pdf> (go back)

13 “2022 Shareownership Survey”, Tokyo Stock Exchange, <https://www.jpx.co.jp/english/markets/statisticsequities/examination/p6b22i00000024gs-att/e-bunpu2022.pdf> (go back)

14 Japan’s Corporate Governance Code, Tokyo Stock Exchange, June 11th, 2021 (revised), < https://www.jpx.co.jp/english/news/1020/b5b4pj0000046kxj-att/b5b4pj0000046l0c.pdf> (go back)

15 We have derived strategic investments at 5% of net assets as an appropriate threshold as the Topix 500 constituents’ median ratio of strategic investments to net assets is 5.4% (as of end-March 2023) (go back)

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Manager - Vendor Relationship Management

Job description.

McDonald's evolving Accelerating the Arches growth strategy puts our customers and people first and demonstrates our competitive advantages to strengthen our brand. We are recognized on lists like Fortune’s Most Admired Companies and Fast Company’s Most Innovative Companies.

Doubling Down on the 4Ds (Delivery, Digital, Drive Thru, and Development)

Our growth pillars emphasize the critical role technology plays as the best-in-class, global omni-channel restaurant brand. Technology enables the organization through digital technologies, and improving the customer, crew and employee experience each and every day!

Global Technology forging the way

Leading the digitization of our business is the Technology organization made up of innovation specialists who build industry defining tech using the latest innovations and platforms, like AI and edge computing to deliver on the next set of groundbreaking opportunities for the business. We take on technology innovation challenges at an incredible scale, and work across global teams who are always hungry for a challenge! This provides access to compelling career paths for technologists. It’s bonus points when you get to see your family and friends use the tech you build at their favorite McD restaurant.

The Vendor Relationship Manager, Vendor Management Office (VMO) is responsible for relationship management with assigned McDonald's portfolio of providers. Leads the portfolio management for Global Technology assigned providers and supervises the efficiency of the VMO within Global Technology.

Working closely with McDonald’s teams to cultivate existing and establish new provider relationships to assist delivering Technology and other initiatives. Responsible for the full supplier lifecycle from identifying, negotiating, on-boarding to handling provider’s performance via a structured governance process. Collaboration with other members of the VMO, Global Technology, Delivery teams, Global Sourcing, Senior Management and Providers.

Responsibilities:

• Manager level position responsible for managed services for technology.
• Facilitates the engagement of key executives in the governance processes for assigned Service Provider(s), including the facilitation of key decisions related to agreements
• Define, develop, document, and establish appropriate communication to McDonald’s Technology and business partners on the operational responsibilities and services provided through the managed services contract(s)
• Executes on the VMO strategy on behalf of McDonald’s
• Serve as a subject matter authority to McDonald’s stakeholders, corporate procurement and legal to obtain their assistance in contract-related activities
• Provide clarity on and interpretations of contractual obligations to McDonald’s personnel, including contract education and awareness
• Manage joint McDonald’s -vendor action items arising from governance decisions from inception through completion, including capture, assignment/ownership, tracking, status reporting at appropriate governance meetings, and closure
• Facilitate timely problem resolution of contractual issues to minimize impact of service disruptions to McDonald’s Global Technology and business partners
• Monitoring performance of contracts against performance indicators to ensure all obligations under agreements are being met
• Work with and advise the McDonald’s stakeholders on contract-related issues and disputes from identification to final resolution, including assignment/ownership, tracking, escalation, reporting and improvement or other action plans
• Ensuring McDonald’s stakeholders understand our contractual obligations and monitors our compliance to them
• This role is responsible for monitoring service level agreement (SLA) performance and supporting resolution efforts when issues arise.
• Works with Technology leaders and the vendor(s) to establish and measure key performance indicators (KPIs), critical performance indicators (CPI) and other metrics that add value to the relationship and support continuous service improvement.
• Define and direct the performance management strategy, SLA Management and reporting processes and tools for all in-scope services
• Perform quality assurance reviews of managed services programs
• Perform reviews of managed services vendors’ services, projects and processes to identify risks and compliance issues on an ongoing basis
• Analyze and maintain performance-related dashboards as well as service performance analytical methods and practices

Accountable for:

• Execute contractual changes with key partners
• Execute changes and/or additions to contract documents (such as SOWs)
• Support Governance process for Providers including Business Reviews, Contract Renewals, Stakeholder Management & liaison between internal functions and Provider.
• Oversee a periodic customer satisfaction survey process, including follow-up and remedial action plans
• Builds McDonald's contractual obligations and supervises compliance to the obligations under the outsourcing agreements
• Support the contract benchmarking and renewal process, with appropriate engagement from partners
• Validates invoices against contract cost and clauses to ascertain whether the set achievements have reached
• Alignment of processes with Global Workforce Solutions
• Coordinate and direct relevant VMO projects as assigned

The successful candidate for this position will have the following experience and expertise:

• Minimum of 5 years’ experience in Technology related Provider Management with large scale providers and negotiation with provider on service 
• The ideal candidate has strong business judgment with a track record of negotiations and overall relationship management
• Experience with presenting to stakeholders and management
• Excellent facilitation and interpersonal skills; team-oriented, collaborative leadership skills and ability to lead colleagues informally
• Strong prioritization skills
• Demonstrated ability to effectively prioritize and execute tasks under time pressure
• Proven project management skills; experience in business systems and process planning
• Ability to work in an advisory capacity to communicate system and business issues, develop and evaluate alternative action plans, and make recommendations
• Demonstrated ability to work with others and to lead and affect process and organizational change and improvements
• Demonstrated commitment to a continuous improvement mindset
• Adaptable and flexible whilst working in a busy global virtual team
• Bachelors Degree 
• IT outsourcing experience and understanding the software development lifecycle
• Experience within an Agile environment

McDonald’s is an equal opportunity employer committed to the diversity of our workforce. We promote an inclusive work environment that creates feel-good moments for everyone. McDonald’s provides reasonable accommodations to qualified individuals with disabilities as part of the application or hiring process or to perform the essential functions of their job. If you need assistance accessing or reading this job posting or otherwise feel you need an accommodation during the application or hiring process, please contact [email protected] . Reasonable accommodations will be determined on a case-by-case basis.

McDonald’s provides equal employment opportunities to all employees and applicants for employment and prohibits discrimination and harassment of any type without regard to sex, sex stereotyping, pregnancy (including pregnancy, childbirth, and medical conditions related to pregnancy, childbirth, or breastfeeding), race, color, religion, ancestry or national origin, age, disability status, medical condition, marital status, sexual orientation, gender, gender identity, gender expression, transgender status, protected military or veteran status, citizenship status, genetic information, or any other characteristic protected by federal, state or local laws. This policy applies to all terms and conditions of employment, including recruiting, hiring, placement, promotion, termination, layoff, recall, transfer, leaves of absence, compensation and training.

Nothing in this job posting or description should be construed as an offer or guarantee of employment.

Application Instructions

Please click on the link below to apply for this position. A new window will open and direct you to apply at our corporate careers page. We look forward to hearing from you!

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Posted : 5/10/2024

Job Status : Full Time

Req ID : REF7009C_743999986698973

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Employers Mull OT Rule Compliance Strategy Despite Legal Déjà Vu

By Rebecca Rainey

Employers preparing to comply with the US Labor Department’s new expansion of overtime protections are fearing another round of legal whiplash if the rule— which is almost certain to be challenged in court —is blocked or paused.

The last time the DOL sought such a large increase to overtime eligibility in 2016, federal courts blocked the rule eight days before it was set to go into effect, and after many businesses had already implemented pay and staffing changes to be in compliance with the new policy.

That same concern is lingering over the DOL’s latest rule to raise the threshold under which workers are owed overtime pay for certain “white collar” workers under the Fair Labor Standards Act, with little time before the rule’s first implementation date of July 1.

Businesses will likely face two options: raise the salary of their employees so they remain exempt, or make necessary staffing adjustments to avoid employees working overtime.

“We could end up in the same situation we did last time where employers were getting themselves into compliance and then the rule was stayed,” said Lisa Schreter, a shareholder at the management-side firm Littler Mendelson P.C. “And that certainly seems like it could be a very distinct possibility here.”

The rule issued by the DOL in April would make it so “ executive , administrative , professional and outside sales ” employees making less than $58,656 would be automatically owed time-and-a-half pay when they work more than 40 hours a week, a significant raise from the current level of $35,568 that is estimated to provide more than 4 million workers with new overtime protections.

“This is a huge change for a lot of employers,” said Stacey Chiu, senior associate at management-side firm Michelman & Robinson’s Los Angeles office, noting that the threshold is set to increase by nearly 70%. “So that’s going to capture a lot of employees who were previously exempt.”

But despite predictions that the rule may be sidelined in court, employers will likely enact the changes anyway to avoid any potential legal risk, management-side attorneys and worker advocates say, and should be making those tweaks soon.

“Employers do have a lot of compliance options they need to evaluate relative to their economic and cultural impact on the business,” said Andrew Spital, chair of Willkie Farr & Gallagher’s employment litigation and counseling practice. “You really don’t want to be making these decisions last minute.”

Salary Adjustments

In order for “white collar” workers to be exempt from overtime pay under the FLSA, the DOL uses a three-part test that requires an employee to be salaried, make more than a certain amount per year, and have certain job duties.

The new Biden rule released last month will increase the salary piece of that test to $43,888 on July 1, which is expected to make 1 million workers newly eligible for overtime. Another 3 million workers are expected to be included when the salary threshold goes up again on Jan. 1 to $58,656. After that increase, the threshold will update every three years based on economic data.

But the paperwork review needed for employers to decide how they want to comply with the rule, like bumping up a worker’s pay or just adjusting their scheduling, as well as the actual payroll reprogramming that may be needed, isn’t cut and dry, attorneys say.

And both choices pose their own recordkeeping obligations or staffing limitations.

“If you’re used to texting your exempt employee at random hours to check in on tasks or assignments, or having exempt employees answer emails with clients during not regular work hours, all of that would have to then be recorded if they’re non exempt. And all of that would be compensable time,” Chiu said.

On the flip side, providing raises to keep employees exempt also poses a “huge” financial burden for employers, she said.

Changes to individual salaries can also have “impacts further downstream” for people who may be above that pay level, cautioned Schreter.

For example, employers that use pay bands for their salary decisions may have to make adjustments to their full compensation structure, because they “have suddenly now narrowed” at least at one level of their pay ladder with the new exemption threshold.

With just weeks to prepare, employers need to “begin the process of looking at the impact of this rule on their workforce, so that they can begin gathering the data to allow them to make the decision,” she added.

Worker Benefits

The adjustments made by employers to comply with the rule are expected to result in $1.5 billion in income being transferred from employers to workers annually, the Biden administration estimates.

That figure includes higher wages due to overtime pay as well as employers who increase salaries so they can continue to keep their workers exempt.

But those changes will benefit workers in a number of ways beyond just taking home more cash, including by driving hiring and pulling some workers off the sidelines, said Judy Conti, director of government affairs at the National Employment Law Project, a think tank that supports the new overtime update.

“There’s so many people in this country who are involuntarily working part time hours, especially in retail, food service, and the hospitality industry, and those folks are probably going to get more hours as employers look to better manage their overtime costs,” Conti said. “Some of those part-timers are going to get full-time jobs, and there will be places where brand new jobs are created altogether.”

To contact the reporter on this story: Rebecca Rainey in Washington at [email protected]

To contact the editors responsible for this story: Genevieve Douglas at [email protected] ; Rebekah Mintzer at [email protected]

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ANU Corporate Plan 2024-2027

Australia's national university.

We present the Corporate Plan for The Australian National University, which covers the period 2024–2027, and is as required under paragraph 35(1)(b) of the Public Governance, Performance and Accountability Act 2013 .

The Australian National University (ANU) was established by an Act of the Federal Parliament more than 75 years ago as a resource for our nation after World War II. The University supports the development of national unity and identity, enhancing Australia’s understanding of itself and our region, generating knowledge and national capability, and contributing to economic recovery and social cohesion.

As Australia’s first and only national University, it is our responsibility to address the complex challenges facing our nation and the world, both the emergent and the enduring: from public health emergencies such as the coronavirus (COVID-19) pandemic to inequality, international instability, and the impacts of climate change.

ANU will continue to collaborate closely with the Commonwealth Government to address these societal challenges. We will share our findings and expert advice to inform public policy supporting Australia’s well-being, security, and prosperity.

Our students, who are future leaders, will have a world-class university experience. Our range of programs will respond to our nation’s and our students’ needs, and our institutional culture will distinguish ANU from other universities.

Our research, led by world-class academics, will continue to be of the highest quality and impact. We provide the platforms and investment to enable the co-creation of innovative approaches to interdisciplinary problem solving and support our academics in realising the possibilities of their discoveries in society and business.

These goals are outlined in a revitalised ANU Strategic Plan, ANU by 2025 . This Corporate Plan accompanies the ANU Strategic Plan and sets out the University purpose, operating context, key activities, and how the University will measure its performance.

The University will continue to deliver on its unique mission to serve Australia and its people.

The Hon Julie Bishop                             Genevieve Bell AO, FAHA, FTSE Chancellor                                                Vice-Chancellor and President (2024 – current)

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Swedbank Robur Corporate Governance & Engagement Report 2023

As the largest mutual fund company in Sweden, Swedbank Robur has a clear strategy on which companies to engage with, and why. The Corporate Governance & Engagement Report 2023 presents how Swedbank Robur works with corporate governance, engagement and drive sustainability issues based on its ownership role.

The 2023 report states, among other things, that Swedbank Robur:

•    Voted at 968 meetings, in more than 40 different markets

•    Evaluated more than 500 shareholder proposals

•    Voted for 91% of the equity holdings 

•    Participated in 100 nomination committees, which is more than any other investor in Sweden

•    Contacted 1418 companies in sustainability issues, with focus on, among other things, climate, biodiversity, and children’s rights

”We can both handle sustainability risks effectively and find good investment opportunities through our work with sustainability and corporate governance. We continue to work systematically to create long term and sustainable return to our savers”, says Pia Gisgård, Head of Sustainability and Corporate Governance at Swedbank Robur.

All decisions regarding voting are made internally by Swedbank Robur. To not outsource the voting is a conscious strategic choice. Proposals to general meetings are evaluated internally according to Swedbank Robur’s Principles for Shareholder Engagement.

”As active owners we believe that it is important to take the opportunity to vote on general meetings. Our senior corporate governance specialists evaluate the proposals. Then we decide how to vote. Our decision is based on what we determine is best for our savers”, says Pia Gisgård. 

Swedbank Robur has four themes for its sustainability dialogues, climate, nature, human rights and corporate governance. Swedbank Robur have dialogues directly with companies, but also use engagement service from ISS Ethix and Sustainalytics 360 and is a member of several international investor collaborations. 

”Collaboration through investor initiatives are important since they increase our possibility to impact companies and give us access to exchange of experience. In addition, it is also resource effective, both for us as an investor and for the companies”, says Pia Gisgård. 

During 2023, Swedbank Robur became a member of the network Farm Animal Investment Risk & Return (FAIRR), which works for a sustainable food industry. They were also founding participants of Nature Action 100, which has the ambition to address nature loss and biodiversity decline and participated in the engagement initiative ”Human Rights in Big Tech”, which was administered by the Council on Ethics of the Swedish National Pension Funds.

More information:

Swedbank Robur Corporate Governance & Engagement Report 2024 (eng, pdf)

Carina Sesser Nylund, Head of information, Swedbank Robur, +46 72 230 52 64

Swedbank Robur is a wholly owned subsidiary to Swedbank and active in Swedbank's four home markets. Swedbank Robur was founded in 1967 and offers more than 80 mutual funds, institutional and discretionary asset management, and management of pension funds. The number of customers is 3 million in Sweden and 1 million in the Baltic countries. Assets under management are approximately SEK 1614 billion (as per Dec 31, 2023). Swedbank Robur's vision is to become a world leader in sustainable value creation.

https://news.cision.com/swedbank/r/swedbank-robur-corporate-governance---engagement-report-2023%2Cc3978851

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