Tricker (2015) depicted that the importance of corporate governance relies on the fact that it allows in maintaining the cohesiveness of an organization. Aziri (2014) also affirmed and stated that lack of effective governance results in corruption and a tarnished image of the organization. The company that is considered is Oman Cables Industry that manufactures variety of electrical products like low voltage power & control cables, pilot cables, overhead power transmission-line conductors and others (Omancables.com 2016). The prime objective of this business report is to evaluate the key notions of corporate governance along with the evaluation of code of corporate governance for concerning UK combined code and CG for Omani listed companies like EOI-2010. The significance and usefulness of this disclosed information will also be illustrated and the entire assessment will wrap up with a conclusion based on the entire discussion.
Analysis and evaluation of key notions of corporate governance
Tricker (2015) mentioned that in the key notions of the corporate governance probity, fairness, responsibility, independence, transparency and accountability are some of the aspects that an organization has to follow. In the context of the probity, it is explained by Acharya et al. (2013) that an organization has to be honest with their stakeholders and should not mislead them by illustrating some wrong information. Moreover, the key roles and responsibilities along with the goals and objectives of the organization have to be clearly mentioned and illustrated to all the employees and the community. Rajasekar (2013) furthermore highlight that the term transparency plays a crucial role in maintaining effective corporate governance by not concealing any crucial information to the society. Lastly, accountability is an approach, where an organization or a person is liable to answer the entire asked question regarding their action and decision.
Code of corporate governance for Oman Cables Industry concerning UK Combined CodeComposition of BOD
This committee comprises of executive directors like Fabio Ignazio Romeo and Mohamed Mustafa Mukhta and non-executive directors like Hussain Salman Al Lawati, Abdul Amir Saied and others. The committees are complying with valuing their human resource manual that maintains the internal regulations and operating procedures of the organization. The details of the organization maintain probity by performing frequent internal checks, internal audits and submission of the regular ISO audits to audit Committee (Omancables.com 2016). These committees moreover comprise a majority of non-executives and along them one-third of them are independent. Van den Berghe (2012) also stated that there responsibility can also be evaluated from their periodical communication with shareholders.
Moreover, compliance with relevant laws and regulations represents their fairness regarding their business operations. In addition to that, Oman Cables Industry also publishes its financial results four times a year individually for quarterly, half yearly, three quarterly and yearly in two local newspapers (Omancables.com 2016). This resembles their concerned towards meetings that occurs minimum four times a year with a gap of three to four months.Functions of BOD
Moreover, concerning UK Combined Code, Oman Cables Industry has accreditations and certifications of BASEC UK, BSI UK and LPCB (Loss Prevention Certification Board) – UK (Omancables.com 2016). These bodies perform an independent investigation and offer process capability assessment and certification of innovative in cable making. BSI UK certified Oman Cables Industry’s wide range of products like building wire-&-cables; XLPE/PVC insulated LV, MV and LV lead sheath cable, and overhead conductor for marinating a high technical standard (Omancables.com 2016). The concerned organization also has the facility of Advanced Technology Laboratory (ATL) that is known for their provision of verification of material combinations, sample and routine tests, voltage testing and “accredited theory and practical training” to protect stakeholder’s interest (Omancables.com 2016). All these approaches reveal their approach towards transparency. Oman Cables Industry also resembles their responsibility by offering programs like “Program for Omanisation and development of Nationals," educational assistance, training and internship program to their employees (Omancables.com 2016).
Significance and usefulness of disclosing information- reporting about Corporate Governance (CG)
Hermalin and Weisbach (2012) defines that the approach of disclosing information regarding their corporate governance is known as corporate transparency. Employees and community have seen corporate governance as the forefront of organizational ethics and establishing standards for preserving a fair trading system. The disclosing of the crucial information resembles the culture of transparency that comprises of encouraging people to speak truth, admitting mistakes and diversifying information sources along with the UK codes like BASEC UK, BSI UK and LPCB UK (Al-Janadi et al. 2013). The respective approach signifies a balance between executive and non-executive members for the organization. This helps the regular people to get aware of the business proceedings of an organization and provide the auditors to review the financial and non-financial status of the company.
Thus, it can be concluded that the Oman Cables Industry follows all the principles of corporate governance to aware all the business functionalities and approaches to their stakeholders. Moreover, the concerned organization also discloses their financial and non-financial report for maintaining transparency. The fairness of their business proceedings can also be seen through their corporate governance report and the audit committee, who are liable to evaluate internal regulations. Moreover, for enhancing the performance of their organization, they take initiatives to provide training to their employee so that every individual can serve their best for the betterment of the organization and society.
Acharya, V.V., Gottschalg, O.F., Hahn, M. and Kehoe, C., 2013. Corporate governance and value creation: Evidence from private equity. Review of Financial Studies, 26(2), pp.368-402.
Al-Janadi, Y., Rahman, R.A. and Omar, N.H., 2013. Corporate governance mechanisms and voluntary disclosure in Saudi Arabia. Research Journal of Finance and Accounting, 4(4).
Aziri, B., 2014. Corporate Governance: A Literature Review. Management Research and Practice, 6(3), p.53.
Hermalin, B.E. and Weisbach, M.S., 2012. Information disclosure and corporate governance. The Journal of Finance, 67(1), pp.195-233.
omancables.com., 2016. Corporate_Presentation_2016. [online] Available at: [Accessed 27 Dec. 2016].
Rajasekar, J., 2013. A comparative analysis of mission statement content and readability. Journal of Management Policy and Practice, 14(6), pp.131-147.
Tricker, B., 2015. Corporate governance: Principles, policies, and practices. Oxford University Press, USA.
Van den Berghe, L., 2012. International standardisation of good corporate governance: best practices for the board of directors. Springer Science & Business Media.