The paper "Corporate Governance in YCP Company" is a good example of a management assignment. One of the factors which contributed to the YCP Company rapid growth was its leaders who were strong visionaries and success-oriented. From the case, it is clear that when Joe and Jeff were chosen to be co-administrators the investors were very pleased. This was based on their ability to raise capital from financial markets and to attract profound investors and to secure synergies. They were also able to secure credit lines from major local and international banks for future financing of YCP expansion and growth.
Due to confidence, the leaders had from shareholders they sort for acquisitions to maintain their growth. The firm was also to expand rapidly because it was able to adapt to change faster. The company was thus involved in excessive diversification of its products. The company growth was also based on its consumer marketing strategies, its genuine information systems and platforms offering undisputable value for money for all its products and services while remaining a low-cost provider, as well as in its innovative R& D which continued to build quality in next-generation networks.
The company also had a competitive reward system for its top management in addition to offering its customers competitive pricing for its products. The visionary leaders on the board also wielded too much power which enabled them to implement all their views. What impression have you formed of corporate governance in YCP Company? Just like what happens in many countries the corporate governance in YCP company seems to expropriate minority shareholders and creditors by the controlling shareholders, in this case, Joe and Jeff.
The outside investors financing YCP Company have exposed themselves to risk of losing their investment and the returns on their investment never materialized since they have been expropriated by major shareholders and who also doubles up as managers of YCP. Even though it has been argued that legal approach is the best way to protect outside investors, that is, both investors and creditors, there seem to be no prevailing legal systems in Neighbour country to protect outside investors. This seems to have aggravated expropriation of outside investors by Joe and Jeff who are the major shareholders who double up as executive managers of YCP Company.
The connection of the firm to media company helped to build a strong image for YCP and its reputation that had many financial have confidence in it and pour more funds towards the company. The reputation of the firm made many investors finance the firm because they felt that their rights were protected. The assurance from Joe that the firm revenue was on the increase helped to win over more investors who thought they were making the right investment not knowing they were being misled.
This made these investors be more vulnerable to expropriation and since there were no prevailing laws in Neighbour country to protect their investment they were more at risk of losing their investment. Although employees or the suppliers are said to be at a lesser risk of being mistreated when YCP collapsed many employees lost their jobs when the firm collapsed. The executive management believed that expansion was key to sustainability and growth and this concealed the fact that a faulty system of billing was being used to attract new customers at the expense of profitability of the firm.