Experts Say Fixing GM’s Flawed Culture Is Barra’s Main Task
Corporate governance has received great mention in the American financial literature especially after the collapse of Enron soon followed by the global financial meltdown. The companies in the United States have since taken the heat and have had to follow the laws and generally acceptable principles. In that context, the substantial Sarbanes Oxley Act read together with stringent corporate governance practices continue to inform policy and management of businesses both of private and public subscription. The key spirit has been the provision of investor confidence in the financial sector with the aim of growing the economy and encouraging American investment. This paper essentially examines the case for corporate governance in the embattled General Motors. The paper posits that the article in discussion sits relevantly with the topic as it depicts the realities of the market and the day to day struggles with reforms in business management.
The appointment of Mary Barra as the Chief Executive Officer of General Motors has sent serious messages to the public of the intention of the investors to reform the recently embattled business entity. Indeed, it has now been confirmed that the CEO need not only bother with the improvement of the quality of the vehicles which are the main products of the company. Far from it, it has been observed within the industry that perhaps what is sickening the once adored motor giant is the lack of a corporate culture that is adorable and worth emulating. In fact, one has scholar has observed, the CEO’s interest should be on correcting the cultural ills that are deep-sited within the company and not the vehicles. Indeed, this analysis and postulation reflects the essential role corporate ethics and culture plays in the industry.
So far Mary Barra and her team appear to have taken the right direction. As for Mary Barra, she remains critical of the “GM Nod.” This refers to the situation where managers agree and concur in the courses of actions arrived at but fail to take active measures for their pursuit and implementation. Mary has observed that such culture must stop. In fact, her philosophy falls soundly within the corporate values and ethics as she is a firm believer in the philosophy of leading by example. In that context, she observes that she would undertake to contribute positively to the company by leading by example. This approach, essentially a top to bottom approach would go down as the biggest wake up call to the corpus of the company’s management.
The Board of Directors has not been left behind. In appreciation of the essential role the Board discharges ordinarily in a company setup, the General Motors structuring need to incorporate the board. In fact, as Barra observes, it is necessary to adopt a system that keeps both the senior management and the board in the know. In addition, in line with the risk based approach to board operations, General Motors has finally convened a risk committee composed of some members of the Board of Directors. This committee shall stand alone and its brief would be investigate, analyze and report on the attendant operational risks. This is seen as being beneficial especially to the investors who would perhaps be aware of the risky nature of the market and, therefore, not be confronted from a vacuum with threats of the company bankruptcy. Lastly, Barra has been advised to make good use of the technological developments for purposes of analysis and operation of company activities. This, it is observed, shall substantially reduce the chances of losses due to corporate cultural ills.
In conclusion, the paper finds the article relevant to the area of study in relation to corporate governance. It is the paper’s postulation that if General Motors under the stewardship of the able Mary Barra follows the corporate governance principles and practices, investors of the company shall soon be earning dividends and evaluating the pay structure of the senior management with the view to rewarding their industry.
Works Cited
Lublin, Joann. "Experts Say Fixing GM's Flawed Culture is Barra's Main Task." Wall Street Journal (2014). Print. <http://online.wsj.com/articles/experts-say-fixing-gms-flawed-culture-is-barras-main-task-1402003954>.
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