Turmoil in the Magic Kingdom Assignment Example | Topics and Well Written Essays - 1750 words

Turmoil in the Magic Kingdom - Assignment Example Answer 1 Any organization should abide by the principles of corporate governance on which the company would run. A company under all circumstances should adhere to these principles. The set up in which proper governance should be run should include the proper allocation and distribution of rights and duties among the top executives and the chief decision makers of the organization. The method of corporate governance would affect all the stakeholders of the organization that include the customers, the shareholders, investors, the employees, the management and the regulatory bodies (Goergen, 2012). Any kind of wrong decision making or framing of policies for selfish motives would affect the stakeholders. Through a proper structure of corporate governance the mission and the objectives of the companies can be framed and the company can move in a specified direction accordingly. First of all a company should have policies that provide for equal rights and treatments towards the sharehold ers. It is necessary for all the organizations that go to the public for funds to know that since the general public are the true owners of the company, the management has a responsibility towards them. In case of any specific circumstances the shareholders should be able to express their opinion and may demand for their rights. Thus situations of information asymmetry should be avoided and irrespective of the amount of stake in the organization they should be welcomed to take part in the decision making process in the annual meetings. In the case of Disney, it is clear that the shareholders were deprived of their right to select the right candidate as member of the board. The CEO has displayed favoritism towards a particular individual who would support him in his selfish endeavors. Thus the composition of the board was mainly controlled by the Michael Eisner’s favorite people who would agree to what the CEO would decide for the company. Those who did not approve of this kin d of governance methods were either sidelined by the board or they were thrown out of the nomination by the board members in support of Eisner. Secondly, apart from the people who have financial stake in the company the others including the customers, suppliers and the employees also have a right to have access to correct information about the various aspects of the business including the rules and policies and the financial position (Low, 2008). In Disney the shareholders demanded for a justification of the high pay out that CEO and the top executives were drawing. Along with that the fluctuations in the prices of the shares had an effect on the financial markets and the mutual fund managers because they questioned the integrity of the financial information of the company. Thirdly, the board of directors being a very significant part of the company should take responsibility for the management practices that they undertake. A company in its journey towards excellence would face sev eral challenges. These challenges have to be met by the board in the most ethical and justified way as possible. Only those people who are capable enough to handle these problems should be included in the board. The members of the board should also have a lot of autonomy and liberty in any decision making process. In this case of Disney, it can be seen that the CEO, Eisner had an autocratic attitude and he forcibly included those people in