Corporate Governance Strategy of the American Football Company - Case Study Example

Corporate governance Strategy– American Football (Company) Name Institution Table of Contents Table of Contents 2 Introduction 3 Section A 3 Internal Public Relations Piece 3 Proposed organisational structure 3 Change Management - Reaction of the stakeholders 5 Ethics 6 Extent of sustainability 7 Internal governance mechanisms 7 Compensation 9 The organisation staff and company executives 9 a) Roles of the General Manager 10 b) Roles of the Assistant General Manager 10 c) Youth director 11 d) Roles of the commissioner 11 e) Club Officials 11 f) The Head Coach 12 g) Roles of the assistant coach 12 h) Players/Customers 12 i) Company Sponsors 12 The corporate values 13 a) Core values 13 b) Objective 13 c) Vision 13 To build an American football program that is highly regarded as the premier American football program in the United Arab Emirates 13 d) Mission 13 Proposed Corporate image with trademark and slogan 14 Section B 14 External justification piece 14 Conclusion 17 Introduction The American Football (Company) is a custodian of a highly effective American football code in the United Arab Emirates. The issue of effective governance has become a theme of extensive interest in the Company given that it seeks to pursue an aggressive expansion strategy across the country. It needs to portray a positive image to its entire stakeholders. Currently, it runs one team in Al Ain, two in Abu Dhabi, and three in Dubai. It also seeks to expand to Sharjah. The Company is on a positive financial breakthrough, and financial results show 20% growth annually. Given its rapid growth, it seeks a new corporate structure that can ensure sustained and persistent growth. This document contains an internal and external corporate governance strategy of the Company. Section A Internal Public Relations Piece Proposed organisational structure The organisational structure consists of the framework based on which the American Football company is organized, as well as which the organisation keeps functioning. At the American Football (Company), the organisational structure is viewed as an operating manual that defines to the employees and the stakeholders the set-up of the organisation, as well as how it functions. The organisational structure used is the hierarchical-based. Accordingly, it has few managers, few staff, and few units. The proposed corporate governance strategy places the Board of directors at the pinnacle of the hierarchy. They are answerable to the shareholders and oversee the general management of the organisation. Placed second in terms of hierarchy is the General Manager, who will report to the board. The General Manager supervises all the employees. Next, the assistant general manager answers to the General Manager. The Youth Director will also report to the Assistant General Manager. The Commissioner will reports to the General Manager and the Assistant Manager, alongside the Head Coach. The Pool Officials will report to the Assistant Manager, while the Assistant Coach reports directly to the Head Coach. Figure 1: Organizational Structure Change Management - Reaction of the stakeholders It is expected that the stakeholders will back this corporate governance strategy, as it puts their interests into perspective. Since the board of directors serves to see to it that the company serves the interests of the stakeholders, particularly the stockholders. Indeed, at the core of this proposed corporate governance strategy is the role of the board of directors, which is introduced to foster hands-on engagement of the company and its stakeholders. The Board shall also seek to integrate shareholders’ perspectives into the company’s decision-making in order to make sure that a suitable balance between shareholder needs and the needs of the management. Hence, the stakeholders are likely to feel a sense of ownership. Overall, this strategy seeks to protect interest of shareholders, as well as provide them with the decisive roles in the company. This is since they maintain the right for appointing the board. The board will ensure that the company generates investment returns for the risk capital that the shareholders put up. Figure 2: Proposed criteria for effective governance The strategy also takes recognition of the shareholders’ legal rights, as this will ensure that the management and the shareholders cooperate to create a profitable and sustainable company. Ethics The corporate governance strategy is ethically oriented. To ensure this, it requires that the management should formulate policies that define the ethical codes of conducts that govern how the company should relate with its stakeholders. The board of directors will assess the ethical adequacy of the corporate governance principles. Violations of codes of conduct will be arbitrated by the board. The Board will also monitor compliance with the UAE Standards of Conduct and Code of Business Ethics Policy. Extent of sustainability The proposed corporate governance strategy will be effective for 8 years. This implies that it will be sustainable. As a matter of fact, the implementation will take one year. Before the implementation, selection of the board members will take place to take the role of overseeing the implementation. The board, alongside the general manager, shall afterwards appoint a committee for implementing the corporate governance strategy. The committee will then be expected to educate the employees on the corporate governance strategy, while specifically aiming at ensuring that they understand their specific roles. The committee is also expected to communicate the corporate governance strategy to the shareholders through a report. There feedback will be encouraged during the annual general meeting. Based on their feedback, and through the board, the committee will fine-tune the corporate governance strategy. It is expected that this will resolve any resistance to change emanating from the board. Any changes made shall be communicated to the shareholders using a monthly report. The remaining period will demand adapting the proposed internal mechanisms into practice. The Board shall monitor the performance of the management during this period, while the management will monitor the performance of the employees to make sure that the corporate governance strategy adapts smoothly into the system. Internal governance mechanisms The internal mechanism comprises the variables for the structure of the board, including the proportion of non-executive directors, board of directors, ownership concentration, and executive compensation. The company’s current corporate structure lacks board of directors. It is proposed that the board of directors should be added to the internal governance mechanism. This is motivated by the company’s plan to expand to Sharjah, which implies that the scope of management will increase, hence calling for a higher governance authority that can oversee the management of the additional subsidiaries. The Board will be made up of nine directors. The post of the executive director will be reserved for the general manager. The shareholders shall elect the remaining directors, as they will serve as agents of the shareholders. Overall, the board of directors shall have a dual mandate: Oversight and advisory 1. The advisory roles entail consulting with the company’s management on issues of the company’s operational and strategic direction. 2. The oversight roles entail monitoring the firm’s performance and reducing the agency costs. Based on the dual purposes, the board of directors will serve several roles, including: Enhancing long-term stockholder value through: (i) Selection and maintenance of a succession plan for the post of the General Manager and important members of management, (ii) Serve as the mediator, as well as make decisions that exceed the powers of the General Manager (ii) Creation and review of the corporate strategies and objectives (iii) Provide oversight of the business and corporate affairs in respect to the developing risks and opportunities. iv) Oversee the financial audits to ensure they comparatively present the true financial situation and financial outcomes. v) Oversee the implementation of the corporate governance strategy vi) Oversee the implementation of code of conduct vii) Promote ethical and responsible practices by the directors, and the executive management. viii) Most of the Board members shall consist of directors who must be “Independent” in compliance with UAE corporate law and standards for stock exchange. ix) Take part in extended session of meetings ahead of the financial year to the review the financial objectives for the fiscal year and the corporate strategies. x) Nominate and select the Governance Committee to make sure it makes recommendations Compensation Compensating non-employee directors will entail combining cash and equity in conformity with the compensation plan that is recommended by the Board. The non-employee directors will be provided with no compensation for the activities they do on behalf of the firm except when they serve on the Board, in compliance with the firm’s established expense reimbursement, as set out by the Board. The organisation staff and company executives The executive management shall be made up of the general manager, who shall run day-to-day operational activities. The assistant general manager, who shall oversee the employee performance, shall assist the general manager. The youth director shall oversee the youth programs, particularly programs for non-adults. The key staff includes the commissioner, who shall be responsible for creation and maintenance of the rules and regulations. Others include the officials, who are basically external contractors who mainly work during the event days, and six coaches and 12 assistant coaches. a) Roles of the General Manager (i) Conduct day to day running of the company’s business (ii) Monitor implementation and suitability of the corporate governance policies. (iii) Report to the Board the issues of management that affect shareholders (iv) Manage and control the company’s human and financial resources. (v) Make sure that the organisation complies with the pertinent UAE laws. (vi) Oversee the company’s internal control structures and risk management (vii) Coordinate the execution of the corporate governance strategy. (viii) Act as a channel between the organisation’s shareholders and executive management and the entire staff. (ix) Monitor and provide evaluation of employees’ responsibilities (x) Make sure that the organisation acts in accordance with the corporate compliance program. (xi) Provide the Board with expert advice on the strategic direction of the company. b) Roles of the Assistant General Manager (i) Provide the general manager with expert advice on the strategic direction of the company. (ii) Translate the company’s strategic plan into the business operations (iii) Manage and control the company’s human and financial resources. (iv) Make sure that the organisation complies with the pertinent UAE laws. (v) Oversee the company’s internal control structures and risk management (vi) Coordinate the execution of the corporate governance strategy. (vii) Act as a channel between the organisation’s shareholders and executive management (viii) Provide the executive manager with the training schedules and labour requirements for the entire staff c) Youth director (i) Oversee all youth programs (ii) Suggest suitable sports programs content for the youth in conjunction with the coaches, the commissioner, and the assistant general manager. (iii) Monitor and supervises the training of assistant coaches; (iv) Assess effectiveness of the coaching rota to the youth; (v) Coordinate the coaching and training of the young people (vi) Attend and report on all youth-related activities and issues d) Roles of the commissioner (i) Responsible for creation and maintenance of rules and regulations. (ii) Develop an effective governance procedures to achieve discipline in the Company (iii) Play the role of a steward in the clubs, based on instructions from the executive management (iv) Effectively administer the company’s programs to ensure compliance with rules and procedures (v) Assess and monitor the policies and the rules governing the company. e) Club Officials (i) Work with the management and the Head Coach to implement new sports initiatives (ii) Oversee the implementation of all courses of actions as set up by the executive management (iii) Work in collaboration with the executive management to create and sustain relationships with the outsiders, by encouraging valuable communication between the customers and the company. (iv) Assist in the training and initiation of members of the club (v) Implement customer service standards f) The Head Coach (i) Responsible for all training activities at the club (ii) Conduct direct coaching of club members (iii) Design and supervise training plans for the club (iv) Supervise seasonal progression of members of the club and monitor their stages of development (v) Educate and take charge of the assistant coaches (vi) Implement the schedules for team travel. (vii) Suggest budget and schedule for team travel (viii) Report to the commissioners whether the policies and regulations are being violated. g) Roles of the assistant coach Suggests an effective competition structure for members of the club. Suggest annual calendar of sports events Manage and deliver quality competitions and events Offer direct coaching to members of the club Determine the workout schedule for members of the club Investigate the events at the pool and report to the head coach. Assist the head coach in providing quality training to the clubs. h) Players/Customers The players/customers consist of 500 Youth, 120 Adults and parents. (i) The parents shall supervise their children while at the sports facilities (ii) The parents or legal guardians shall accompany children who are below the age of 8. (iii) Customers are restricted from going into the changing areas or lavatories of the opposite sex i) Company Sponsors i) Provide business expertise to the club ii) Connect the Club to the larger business community, particularly financers. iii) Promote the club to investors iv) Provide business solutions and suggests solutions for improving business The corporate values a) Core values The core values include transparency in management of company’s affairs, integrity to ensure compliance with ethical standards, accountability to ensure proper management and reporting structures, and efficiency to ensure effective utility of resources b) Objective Promote football to the general population Create a setting for socialisation Promoting the physical and mental wellbeing of the community c) Vision To build an American football program that is highly regarded as the premier American football program in the United Arab Emirates d) Mission To provide local communities, fans and partners with premium American football experience and entertainment in UAE, and to do so in a manner that is consistent with the core value of integrity. To positively impact the UAE youth by creating a culture of excellence that they replicate to enhance and inspire personal and professional growth beyond their American Football experience. To develop sports stakeholders who are dedicated to personal excellence and team success in the community, at home, and in the football field. Proposed Corporate image with trademark and slogan Figure 3: Trademark Section B External justification piece The proposed corporate governance strategy serves to address varied stakeholder needs, and seeks to attain the highest reputation for the company. Good reputation will ensure positive coverage by the media. The corporate governance strategy seeks to provide effective leadership, effective coordination of work process, and effective people management and stakeholder management, as well as effective organisational culture (See Figure 4). Figure 4: Summary of corporate objectives and values The corporate governance strategy defines the corporate management processes with focus on promoting effective governance. It places the board of directors at the core of management to ensure greater transparency and accountability, as this will promote the reputation of the company even as it pursues aggressive expansion strategies to to Sharjah, apart from Dubai, Al Ain, and Abu Dhabi. It also introduces financial criteria for persistent participation in the competition. The strategy also assumes the role of corporate communication since it is viewed to be a management mechanism for effective coordination of communication between internal stakeholders and external stakeholders. It also sets out an effective stakeholder map (See Table 1) Table 1: Proposed stakeholder map (adapted from Foreman 15) The customers are also able to understand the structure of the company’s governance hence knows the level of efficiency in the company. The corporate governance strategy also enables potential investors to understand the level of transparency, efficiency, and accountability in the company. Indeed, the corporate governance strategy is also intended to attract potential investors, as well as to encourage communication with the existing investors, the customers and the greater communities. The strategy also seeks to promote the management of stakeholders’ relationship. The strategy portrays stakeholders as a business priority in the eyes of the shareholders, and as a caring partner to the customers and the larger community. It also defines the roles of the Board of directors, the management, the volunteers, and the staff. Therefore, it seeks to regard stakeholders as being fundamental for the success of the business, even as it seeks to expand to Sharjah. Conclusion At the core of this proposed corporate governance strategy is the role of the board of directors, which is introduced to foster hands-on engagement of the company and its stakeholders. The Board shall also seek to integrate shareholders’ perspectives into the company’s decision-making in order to make sure that a suitable balance between shareholder needs and the needs of the management. Hence, the stakeholders are likely to feel a sense of ownership. Overall, this strategy seeks to protect interest of shareholders, as well as provide them with the decisive roles in the company. This is since they maintain the right for appointing the board. The board will ensure that the company generates investment returns for the risk capital that the shareholders put up. References Foreman, Julie. "Corporate Governance Issues In A Professional Sport." Swinburne University of Technology John Street, Hawthorn, 2002 Read More