Corporate Governance at Citic Pacific Essay

Pages: 3 (806 words)  ·  Bibliography Sources: 0  ·  File: .docx  ·  Level: College Senior  ·  Topic: Business

SAMPLE EXCERPT . . .
There is also obviously a lack of proper control and oversight in Citic Pacific's current corporate governance procedures. The transactions that led to the high degree of foreign exchange exposure and the eventual two-billion-dollar loss were not even properly authorized, according to the company's statements, meaning that not only did the company use shareholder money in a reckless way, but it was not even an intentional risk decided on by the pertinent powers. The fact that investors were not told immediately of this development only exacerbated the situation.

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Essentially, the problems in this case and in Citic Pacific's corporate governance boil down to two problems, regardless of the state-owned status of the company: first, there is a lack of adequate controls in the company that allow large risks not commensurate with their potential reward to be taken, and even to be taken without proper authorization and full consideration; second, the current modes of corporate governance do not put an adequate emphasis on the rights of shareholders and of the responsibility the company owes to its investors. Both of these issues need addressing in order to restore investor confidence in the company and to ensure that similar risks are not taken in the future, as well as to make it clear to shareholders and potential shareholders in the company that their concerns are the company's concerns, rather than simple nuisances or inconveniences that complicate operations. The corporate governance demonstrated in this case definitely gives the impression of this latter view of shareholders and their interests, which is not conducive to good business practices or to continued success of an investment company through the acquisition of increased numbers of investors and a growth in the intake of investor dollars.

Essay on Corporate Governance at Citic Pacific: Assignment

This case clearly indicates that the independent directors in the company do not feel bound by shareholder interests or necessarily by company policy. This does not bode well for the internal risk management in the company, either. Effective corporate governance has not been demonstrated in this case, and there is no indication that this will be changing in the near future. [END OF PREVIEW] . . . READ MORE

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Corporate Governance at Citic Pacific.  (2010, November 11).  Retrieved April 5, 2020, from https://www.essaytown.com/subjects/paper/corporate-governance-citic-pacific/388839

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"Corporate Governance at Citic Pacific."  11 November 2010.  Web.  5 April 2020. <https://www.essaytown.com/subjects/paper/corporate-governance-citic-pacific/388839>.

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"Corporate Governance at Citic Pacific."  Essaytown.com.  November 11, 2010.  Accessed April 5, 2020.
https://www.essaytown.com/subjects/paper/corporate-governance-citic-pacific/388839.