The paper 'BP Oil Company - Perspectives Evaluation" is an outstanding example of a business case study. The BP Oil Company has over the decade served in the energy industry. In this regard, with its headquarters in the UK, the company has over the years expanded its influence and operations across continents to set up oil drilling equipment and infrastructure in Africa, Asia, and the USA. As such, with a rising profitable base in the energy industry, the organization attracted high investments due to its high returns on investments.
However, besides its profitability and growth stage in the life cycle, the energy industry has been faced with increasing criticism of the failure to adopt and apply corporate governance principles in their management (Cobbaut and Lenoble, 2003, p. 40). In this context, the BP Company was highly criticized for lack of corporate governance principle application, especially after the Gulf of Mexico oil spillage crisis. In this regard, industry and environmental analysis argued that if the organization had applied corporate governance principles in the entire process, the crisis was avoidable and could not have happened to the high casualty cases; both in terms of the drilling manpower affected as well as the marine life affected (Landau, 2011, p. 45).
This essay develops a critical focus on the organizational corporate governance application challenges through a series of corporate governance principle criteria developed in the essay. Finally, the essay offers strategic system recommendations through which the organizational corporate governance systems could be improved in the future. Perspectives Evaluation In order to develop a conclusive and critical analysis of the BP Company corporate governance failures, this essay section develops a criteria base through which key corporate governance issues are listed and described.
Among the identified influential corporate governance principles include the directors’ independence, their tenure and reward system, and the organizational reporting system transparency. This essay section offers a detailed analysis of each of the components and how they implicate on the adoption of corporate governance management approach. Directors’ Independence One of the key issues and components in any corporate governance system in organizations is the establishment of a board of directors. In this regard, a board of directors is directly involved and tasked with the mandate of directing the development and attainment of the organizational strategic goals and objectives.
Therefore, a board of directors’ composition influences the nature and type of corporate governance policies developed. In this connection, an evaluation by Leblanc (2005, p. 10) established that a critical approach to ensure quality in organizational corporate governance, organizations should develop and focus on building the director’ s independence. Independence in this context implies the inclusion of external directors not directly involved in the organizational day to day management processes. In this regard, the International Federation of Accountants (2009, p. 11) stated that through the inclusion of independent directors in an organizational board, it ensures the inclusion of stakeholder interests. Therefore, this inclusion allows for the development of stakeholder theory, application, rather than the shareholder's theory application.
A key difference between the two is that through a stakeholder’ s theory adoption, unlike under the shareholder's theory, the interests of all the stakeholders, including the employees, the public, and the environment among others play a crucial role in the decision-making and management process (Tricker, 2011, p. 389). Therefore, based on this analysis, this analysis, evaluation of the BP Company will investigate the extent and nature to which the organizational board had independent directors representing the diverse interest group’ s interests such as environmental conservation and employee well-being.
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