Corporate Compliance Benchmarking

Corporate Compliance Benchmarking

In organizations it is asked for employees to have loyalty in the workplace, but is that loyalty ever reciprocated? Employers have a job that needs to be done and look to employees to show up to work on time, everyday and perform tasks to the best of their abilities. This type of atmosphere just doesn’t materialize; it needs to be cultivated, developed and strategically implemented. To see how to create this type of environment, it becomes necessary to examine some of the best practices adopted by target companies.

Incorporating some of these benefits into everyday work schedules creates a balance and encourages a more creative and loyal employee. Thus, reducing the time the employee spends away from work but increasing individual job satisfaction. Similarly, Coca-Cola knew that putting emphasis on their employees would keep customers returning. In this corporate compliance it gives CareNetWest Companies a chance to find and fix areas of opportunity.

It has already been witnessed when rushed into decisions, feeling as if a company’s back is to the wall; mistakes will be made with out doubt. The way out of these pit falls are not impossible it just requires much planning. When a strategy is broken down into its simplest form, what role each area plays in the making a successful business is revealed. Many say once a company hits the bottom of the bucket it will be hard to claw back to the top. However, CareNetWest Companies will take baby steps to become a household name all over again.

Implementation of new methods and procedures will make the company kick open the door on a market that was once close to the company. This organization will enhance the way they do business with its internal and external customers. CareNetWest Communication has learned in its previous failures that with out happy employees quality work will not and cannot be produced. In hopes for a more profitable future many companies will take different steps and measures to forge toward a future investors and stakeholders alike can be made proud.

Corporate Governance Concepts

Corporate governance is defined as a system of controls that maintain the balance of power between stakeholders, senior management and the board of directors. The key concepts that have defined the present day corporate governance are based on four primary areas. The areas include changes in the United States corporate governance over the past 20 years, international developments, recent regulatory changes and compensation and incentive pay.

U.S. Corporate Governance Changes

Corporate structure and focus has shifted in the past 20 years. Prior to 1980 corporate managers did not have the shareholders interest as their primary focus (Chew Jr., Gillan, 2005). This is due in part to the view corporate managers had with respect to the corporation (Chew Jr., Gillan, 2005). Mangers believe they were representing the corporation rather than the shareholder. This view is what prompted the idea to focus on increasing growth rather than maximizing shareholder wealth. During this time frame hostile takeovers were prevalent and internal incentives for management ownership of stock options were scarce. While corporate managers continue to reallocate large amounts of resources in the economy through internal capital and labor markets the boundary that lies between markets and managers have shifted (Chew Jr., Gillan, 2005). Sears, Costco, Nissan and Coca Cola are all organizations that approached corporate governance in different ways. Costco chose to implement what they refer to as “The Code” which states five simple rules. They are 1) Obey the law. 2) Take care of our members. 3) Take care of our employees. 4) Respect our suppliers. 5) Reward our shareholders. Sear chose to announce changes in its corporate governance to satisfy a shareholder which has turned out to be slow developing at best. Nissan chose to merge with another organization. This merger resulted in a change regarding Japanese traditions and a way to fix problems that Japanese customs would not allow. Since the merger and change in corporate governance Nissan has reported profit and $20 billion debt erased. Coca Cola believes in robust communication as a source for good corporate governance. Communication allows all shareholders to maintain their involvement and provides them with resources to answer any questions that may arise.

International Developments

The recent outbreak of scandals in U.S. companies makes it easy to draw the conclusion that the U. S. Market performed worse than the overseas markets (Chew Jr., Gillan, 2005). This does not seem to be the case when reviewing recent data. Although U.S. stock market has experience negative returns during the past several years, the market has performed well with respect to European and Pacific markets (Chew Jr., Gillan, 2005). In fact, the U.S. stock market compared favorably when returns were compared with markets of larger individual countries (Chew Jr., Gillan, 2005). Individual may conclude that U.S. corporate governance is the reason for the difference in stock returns (Chew Jr., Gillan, 2005). Whatever the reason for the disparity one can conclude that for whatever the shortcomings are in U.S. corporate governance they have not been significant enough to prevent the stock returns of U.S. companies from outperforming those of its global counterparts (Chew Jr., Gillan, 2005).

Changes in Executive Compensation

The total compensation for U.S. Executives has tripled in the time span of 15 years (Chew Jr., Gillan, 2005). The increase in compensation continues today. This is evident in a report published by Forbes stating compensation for CEO in 2003 totaled 3.3 billion dollars and has increased to 5.1 billion dollars (DeCarlo, 2005). The increase equates to 54% for CEO’s in the top 500 companies in the world. This increase has happened post Enron and WorldCom scandals. The founder of Whole Foods Market decided that he would reduce his salary to one dollar and forgo future stock options (Fortune, 2008, p.1). This was done in the attempt to divert the scrutiny the organization was facing regarding regulatory issues. Unfortunately, after this move annual shareholders meeting was held and the shareholders were stifled.

Regulatory Changes

In the wake of the Enron and WorldCom scandals the government has instituted a series of regulatory changes. The scandals of these two organizations changed the way business is done today. Organizations are under more scrutiny than ever before. The primary change being the Sarbanes-Oxley Act of 2002. The New York Stock