Internal and External Corporate Governance Strategy for Swimming Club - Case Study Example

Name Instructor Class Date Internal and External Corporate Governance Strategy for Swimming Club Introduction Corporate governance plays a major role in the successful growth of a businesses as well as its effective performance. In simple terms, corporate governance refers to the relationships between and organization’s management, its shareholders, its board, and other stakeholders. Furthermore, corporate governance is also a mechanism for setting the organization’s objectives, the methods of achieving these objectives, and how performance is monitored. Therefore, there are numerous issues involved in corporate governance strategies. Successful businesses around the world have utilized their corporate governance strategies to ensure increased effectiveness and often portray a positive image among its stakeholders or in the public. The following case study aims at developing an internal and external corporate governance strategy for a swimming club in the UAE. The case study will include a public relations piece as well as a justification of the piece. Corporate Governance Strategy The swimming club corporate governance strategy is based on several principles. The principles are ideal for setting a foundation on how to effectively implement and understand the whole corporate governance strategy. The overall corporate governance strategy will be based on accountability, which involves being responsible for decision and consuming suitable mechanisms in place to guarantee the club operates under applicable and accepted standards. Moreover, the governance strategy also focuses on increased customer service, which involves ensuring that all ideas, strategies, and policies are developed and implemented to ensure that customer needs and their services are met in a suitable manner. The corporate governance strategy is also founded on integrity that will require the swimming club to act ethically and fairly to meet all the interests and needs of stakeholders. Again, the club will endeavor to be efficient by guaranteeing the use of resources efficiently and ensuring welfare for the community and environment for increased sustainability. Lastly, the club will settle on increased leadership as a basis for commitment in corporate governance. The overall strategy will focus on putting customers first, turning ideas into action, unleashing the potential of employees, and empowering people as well as stakeholders. Corporate Structure The corporate structure of the swimming club should be developed in the manner presented above using the organizational chart. The general manager should be the top most executive of the company. The role of the general manager should be the daily managerial running of the company that includes administrative functions that involves directing and leading employees. This should also include delegating administrative duties including payroll, accounting, paperwork, and offering freedom to manage additional issues in the daily operations of the swimming club. Moreover, the manager should be the one in charge and responsible for authorizing all major activities such as signing of agreements or deals as well as large payments. An additional responsibility should include building increased relationships as well as ensuring that all the needs of sponsors are met. It is very critical for the general manager to constantly engage with sponsors to ensure increased support and future development of sponsorship contracts and deals. The assistant manager should be the second most top executive and the person in charge of company operations when the manager is unavailable. The role of the assistant manager should include human resource management. This is because the swimming club is a small-sized business with no human resource department. The assistant manager should ensure that new employee are hired or non-performing employee are fired. This also includes finding a replacement for employee who do not report to work or for their duties. In this case, the assistant manager should be responsible for all the human resource management duties. Additionally, the Youth director and commissionaire should report to the general manager and assistant manager accordingly. The youth director should also supervise the head coaches as they supervise the junior coaches who will together handle the customer including youth and parents. Since the business is not based on shareholders, this does not require disclosing the shareholder rights and obligations. Additionally, as indicated earlier, the swimming club is a small-sized business thus does not require shareholder policies. Succession Plan The current owners of the swimming club are unknown, but it is of great importance to develop a succession plan that ensures the future of the company is well known. The company should develop a policy that requires the current owners to illustrate their future plans of ownership for the company. The current owners should clearly indicate if they wish to offer out shares in the company for potential investors or will continue to own the company in the future that is if it expands to a medium or large-sized company. In this case, it is best for the company to illustrate future plans of opening up the business ownership through selling of shares to potential investors for increased future growth and sustainability. Advisory Board The swimming club does not have a board of directors. This is the reason for the suggested advisory board to offer corporate advice for the company on future growth and strategic decision making in its expansion. The company should recruit numerous board advisors from the same field or with increased experience in the field of swimming or sports industry business. The advisory team can include close professional friends, customers, and even employees. The general manager should also be present in the advisory team. This advisory team should be set up on a voluntary basis rather than under the requirements of corporate governance laws. Moreover, it should be based on all the responsibilities of the traditional board of directors in bigger corporations. Their role should include ensuring increased integrity of financial data, decreasing the risk of conflict and mismanagement of the swimming club, and increased assessment of operation for optimal performance. The board members should also be able to determine or offer advice for remuneration of executives and employees. Moreover, the board of directors should include close and trusted people who may include mentors, trusted professionals, and loyal customers. All expectations of the board members should be known and indicated clearly. Conflict of interest should also be noted to avoid any ethical implications in the suggested advisory board. Change Management Change management is very important in ensuring that the new corporate governance strategy is implemented effectively. Based on the nature of the swimming club, it is practice to develop the corporate governance structure and allow the stakeholders to integrate or adapt to the new change. This is because the process of implementing change within the current organization can be a slow, time and resource consuming. It is only practice to develop the changes and allow all stakeholders to adapt and integrate in the new strategy. All the stakeholders of the swimming club are expected to take up the change in a positive manner. The executive should be pleased with the establishment of clearly laid out policies and strategies of the company. Again, employees should look up to the corporate governance strategy as a new beginning where they can count on the strategy to ensure checks and balances within the company. As for the customers, they should be happy the swimming club is illustrating increased commitment for excellence in their operations, customer service, ethics, integrity, and products. However, the change may develop numerous conflicts. Most people are not aligned to changes and will try as much as possible to reject certain changes. This is the main reason of developing a whole new organization in terms of corporate governance and getting the stakeholder into the new organization. This will require the best executives and employees to be chosen for the new change. Having what can be called “bad apples” in the new company that includes poor performers or people opposed to change can lead to increased failure in the change management. Overall, the change strategy should expect positive reactions from all employees, which can ensure increased success of the change implementation. Numerous techniques such as employee training and coaching should be used to ensure that they understand the overall need, purpose, and benefits of corporate governance. Ethics Ethics is paramount for any corporate governance strategy. As such, the swimming club should integrate ethics as part of the overall corporate governance strategy. The corporate governance strategy is based on numerous principles that include integrity. In this case, the suggested corporate governance strategy should include a properly defined ethics program. The ethics program will stem from clearly identifying the right and suitable values of the company. Additionally, the company will set up a vision statement. For instance, the swimming club can adopt a vision statement that reads “working with integrity and customer –orientation to enhance the swimming sport as a talent and profession”. This means that all decision or major decisions are assessed if whether they move the swimming club closer to the vision or further away. All decisions that seem to move the company further from the vision should be viewed as unethical. Another element of the ethics program should be a well-defined code of ethics. This should include all the expected and required behaviors as well as the penalties for not meeting the expectations or standards. The commissionaire should also be appointed as the ethics officers. Since the commissionaire is in charge of setting the rules and regulations, it is only suitable for the individual to act as the ethics officers. This position should ensure that performance standards are set and used to question or reflect employee performance. Ethics should also be trained to employees through numerous methods such as role playing and offering hypothetical examples for employees to apply their ethical abilities as well as overcome ethical dilemmas. The swimming club should adopt an ethics help line to ensure that employees can report on ethical issues. Lastly, the company’s ethics program should be implemented together with a measurements and reward system. This will encourage an organizational culture of ethical conduct because employees will believe that the company is committed good ethical behavior is rewarded and unethical behavior is discouraged. Overall, the strategy focuses on ensuring ethical conduct in all organizational operations including relationships and service to customers. Short term vs. long term The corporate governance strategy is sustainable in both the short and long term. In the short-term, the corporate governance strategy will ensure that current operations are based on a common framework of getting things down in the right manner. This means that the company has a reference framework from understanding each person’s roles and responsibilities as well as the hierarchy or power or influence within the organization. Additionally, the corporate strategy will help improve the overall corporate image of the company in the long term perspective. Moreover, all stakeholders stand to benefit since there exists a suitable or effective strategy or framework for ensuring the future growth of the company. The corporate governance will be implemented in about two years. The overall implementation period is intended to ensure that all issues, mistakes, or improvements are addressed to the existing strategy until it is fully functional. Overall, the corporate strategy is a sustainable decision that will offer short term and long term benefits. Internal and External Governance Mechanisms There exist numerous internal and external governance mechanisms that help to monitor the activities and operations of a company and make corrective changes or take corrective measures to achieve organizational goals and objectives. The internal governance mechanisms can be divided into the executive and staff governance mechanisms. Internal governance systems for executives The first internal governance system I would introduce to the swimming club is monitoring of the executive team by the advisory board. Although there is no need for hiring a board of directors that has the legal capacity to hire and fire executives, the swimming club should adopt an advisory board that can offer advice. The board should be responsible for monitoring the different issues that surround executive decision making and performance. The advisory team should evaluate the quality of decisions taken by executive or the top management and make appropriate recommendations. This goes beyond confirming accounting or financial performance to the issue of gauging the quality of decisions made by the manager, assistant manager, commissionaire, and youth director. This internal mechanism ensures that the top management can be held accountable and can be monitored in terms of their performance. Having an advisory board is just the first step in developing a culture where each individual is monitored and assessed based on their performance alongside that of the company. The executive should also appoint an internal auditor to measure and evaluate the overall operations, financial reporting, and compliance standards to ensure the company meets its objectives in the required manner. Furthermore, the executive team should be decentralized to offer a balance of power. This means that top managers should not hold all the power or responsibilities. Therefore, the company should delegate different duties and responsibilities to different top executives in the company. For instance, the youth manager should be offered additional responsibilities to ensure a balance of power. Internal governance mechanisms for staff To ensure increased commitment and an alignment of the staff’s interest with that of the company, a staff remuneration program should be implemented. This includes executives and the staff. The company should offer long term incentives such as bonuses, profit sharing, and salary rises. The executive team should be offered these compensation packages in a clear and well-defined manner that ensures they understand that offering their best translates to increased benefits for them as individuals. Additionally, the same case applies for employees as they view the compensation and invectives as a basis for motivation and working towards attaining the organization’s goals and objectives. An employee development and training program will also be implemented as a core element in human resource management. As indicated in the governance principles, the company should work on empowering its employees. Training and development of employees is significant in ensuring that employee feel valued and they can do more than just work, but enhance their skills and develop their careers further. In addition, employees will also be recognized for their different achievements that includes awards and recognition from top management. Recognizing hardworking or innovative employees is important in instilling motivation as well as increasing job satisfaction for the employees. Overall, these internal governance mechanisms are significant for ensuring increased corporate governance within the swimming club. External governance mechanisms The swimming club should concentrate on diversifying its overall cooperate strategy by enhancing its competitiveness. External governance mechanisms offer increased benefits for customers as well as the corporation. This is because customers can enjoy increased quality in terms of services and products. The swimming club should focus on a strategic expansion to Sharjah, Fujairah, and Rak. There are different expansion or market entry strategies for the swimming club to use in order to develop increased competitiveness. The swimming club should seek to acquire underperforming swimming clubs or other sporting companies with the aim of enhancing their strategies for increased competition. The acquisition should be dome appropriately by evaluating risks and potential of the business. Additionally, the company should focus on merging or partnering with potential businesses as well as investors. This means that the company should work towards opening up the business to potential investors. This will allow the company to have increased capital that is necessary for effective expansion strategies. Overall, the company should adopt a competitive approach towards achieving its future growth goals and objectives. Corporate Values The core values statement of the swimming club should be offering exceptions customer service, treating customer as human beings with love, and being able to empower the youth and their parents through sports. The corporate values are based on ensuring that the company can communicate its values to its stakeholders including staff, and customers. As indicated earlier in the principals of corporate governance, the company will focus on the customer as first. The core value of the swimming club is ensuring increased customer experience. Customers will always be treated with respect, integrity, and a degree of professionalism. Moreover, the company also endeavors to encourage innovation through training and development as well as turning ideas into action. In this case, the company will welcome all ideas and work by offering necessary resources to turn such ideas into action. The company will also work on empowering its employees through increased mentoring, training, and development. Lastly, the business will conduct all its actions as well as operations in an ethical manner that seeks to enhance customer experience as well as the whole sports experience for the youths. Corporate Image The corporate image of the company is supposed to illustrate an image that portrays a youthful swimming experience. The whole idea is to create an image that tells customers that the swimming club is a fun and secure place for them to practice swimming. Swimming is a fun and happy sporting activity. The swimming club should also illustrate increased professionalism in terms of swimming as a sport. The customer should see the swimming club as a fun and professional company with the all the abilities and resources to fulfill their needs in terms of swimming and customer experience. The image of the company should also be impended in the company’s logo. The company logo should include a picture of a girl swimming and a male swimmer winning medal. This will illustrate the professional and fun side of the swimming club. Overall, the swimming club’s image should reflect a youthful, fun and professional swimming experience. External Justification The need for adopting a corporate governance strategy is of great importance for ensuring sustainable operation and growth of the business. MMM states that corporate governance based on accountability, integrity, and openness involves the managing and control of organizations by offering a framework that defines the roles, rights, and responsibilities of stakeholders. In this case, it is clear that a corporate governance strategy is an effective way for establishing suitable frameworks to define how a company should operate. Mohammed Bin Rashid Establishment for SME Development (Dubai SME) article concentrates on how an SME such as the swimming club can implement an effective corporate governance strategy (1). In this case, Mohammed Bin Rashid Establishment for SME Development (Dubai SME) suggests that corporate governance goes beyond compliance with regulatory and legislative requirements, but extends to instilling the principles of integrity and accountability throughout the company while developing a mechanism of checks and balances (1). Therefore, a corporate governance strategy is an effective mechanism for increased development and future sustainability of the organization. The first step of developing a corporate governance structure is by developing the organizational structure. The corporate structure ensures that the whole organization understands the hierarchy and each responsibility within the company. The structure is also a means of ensuring that all responsibilities and the different relationships as well as how they interact is made clear to all shareholders. Furthermore, the structure part of the corporate governance strategy should also consider ownership issues (Mohammed Bin Rashid Establishment for SME Development (Dubai SME) 1). This often occurs in larger corporations where shareholders are involved. Nonetheless, small-businesses should also consider ownership issues and develop a clear succession plan that defines the current and future plans concerning ownership of the company. Not developing such a plan may lead to increased difficulties as well as conflict when the need to open up the company for potential to investors is identified. The idea of an advisory board is based on internal governance mechanisms. Most large corporations have a board of directors that oversees the performance and conduct of the executive team or top management. Since most top managers may have increased power and influence, holding them accountable may be impossible or a challenge. However, a board of directors helps in assessing the performance and decisions of top managers (Mohammed Bin Rashid Establishment for SME Development (Dubai SME) 1). This is the justification for recommending an advisory board for the swimming club. The advisory board offers the same role and responsibilities like that of a board of directors. All these changes are likely to attract increased resistance, thus the need to manage the change. In this case, the company is expected to adapt to the new environment or the new changes. This is based on the idea of people as social beings who will adapt to new and different environments rather than seeking an environment that is suitable for their existence. This means that once the change has already been created, the stakeholders should be able to adapt to the new changes. Nonetheless, only the best people can be chosen to adapt to the new change rather than other who may not possess the capability to adopt to the new changes. The core of each corporate governance strategy is the degree of integrity or accountability that management or all stakeholders of the company illustrate. Overall, the issue of ethics remains paramount in ensuring that corporate governance works effectively. Ethics has to do with all the corporate value as well as virtues in terms of enhancing integrity. Having an ethical program is essential to developing a culture of working under ethical codes that go beyond the idea of profit making. Ethics means that the company seeks to act in manners that realize their overall vision and do not merely focus on meeting targets or making profits. Again, the short term and long terms outlook of the corporate governance strategy is well in place since it illustrates increased benefits all the stakeholder in the short and long-run. Furthermore, the corporate image of the company is supposed to illustrate an image that portrays a youthful swimming experience. The whole idea is to create an image that tells customers that the swimming club is a fun and secure place for them to practice swimming. Swimming is a fun and happy sporting activity. The swimming club should also illustrate increased professionalism in terms of swimming as a sport. The customer should see the swimming club as a fun and professional company with the all the abilities and resources to fulfill their needs in terms of swimming and customer experience. Conclusion In conclusion, corporate governance plays a major role in the successful growth of a businesses as well as its effective performance. In simple terms, corporate governance refers to the relationships between and organization’s management, its shareholders, its board, and other stakeholders. The swimming club can utilize this strategy based on the principle of leadership, integrity, innovation, and empowering people to achieve its goals. Additionally, the swimming club should implement the internal and external governance mechanisms to ensure that governance works effectively all over the organization. Works Cited Mohammed Bin Rashid Establishment for SME Development (Dubai SME). The Corporate Governance Code For Small and medium enterprises. 2005. 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