This website uses cookies to ensure you have the best experience. Learn more

Integrating Corporate Governance With The Balanced Scorecard

1248 words - 5 pages

Briefly, the Balanced Scorecard (BSC) is a strategic performance management tool that measure not only on financial outcomes but also on the operational, marketing progresses and strategy executives etc. In modern society now a day, the financial measurements have limitations.The Balance Scorecard (BSC) is developed by Drs. David Norton and Robert Kaplan in 1992. It has gained global acceptance as a powerful framework to help leaders define and rapidly implement strategy. This is accomplished by translating the vision and strategy in to a set of operational objectives that drive behavior and performance. The BSC concept is built upon the premise that measurement motivates and that measurement must start with a clearly described strategy. There is a balanced set of performance measures including four perspectives, so called: Financial, Customer, Internal Business Processes and Learning & Growth. The significant feedbacks, where generated by these four perspectives, could disclose more information during the business, rather than measuring performance based mainly on financial indicators.Before discussing the four business perspectives, there are several limitations that financial outcomes couldn't do the same as the four business perspectives do. The financial outcomes measures the performance that made by company on "yesterday", which it's not the quickest way to discover the problem that is existing or still undercover behind the financial outcomes. Since the measures focusing on results at the end of a time period, we are always solving the yesterday's problems. In other words, we are solving the surfaces of the problem, but not solving it internally. Shouldn't we discover the problems before they break out if there is solution for us?Therefore, the four business perspectives will able to measure the non-financial performances rather than only measuring financial performances. Measuring or scoring these non-financial performances during the business operating, show you whether your business is performing well or effectively during the procedure of creating returns for you no matter in a short-term or long-term consideration. The following show the processes of the value being created across these four business perspectives.Each of these four business perspectives has specific strategic objectives and performance measures to be achieved and taken.For the Financial perspectives, to satisfy shareholders, what financial objectives must be accomplished? Increasing the shareholder value would be one of the strategic objectives. In this case, we measure (i) earning per share, (ii) net income, (iii) return on assets, (iv) return on sales, (v) return on equity, (vi) product cost per unit and (vii) customer cost per unit to show whether the company is performing well or improving.Secondly, to achieve the financial objectives, what customer needs must be met? The Customer perspectives would have strategic objectives such as (i) acquire new customers,...

Find Another Essay On Integrating Corporate Governance with the Balanced Scorecard

The Rules and Principles of Corporate Governance

1048 words - 5 pages family members/shareholders barely know each other and each has a different vision for the business. Such a contrast of visions results in chaos that ultimately leads to destruction of the business. In addition to this problem families usually need outsider investment in a stage of their business growth; preparing for and accepting outsiders is an issue that families need to deal with. Corporate governance in the context of family business

Corporate Governance at Satyam: The Satyam Scandal

835 words - 4 pages . Satyam’s case provides us with very useful practical lessons that can be applied to ensure efficient corporate governance. Useful practices to reduce the risk of poor auditing performance may include (a) periodic rotation of audit firms and audit firm partners, in order to avoid collusion between the to entities and reduce dependency; (b) regular peer review, to expose possible fraudulent activities or negligence; (c) evaluation of reports of audits, transparent corrective actions and clarity in reports, which can enhance and ensure trustworthiness in the auditing system as an efficient and effective form of corporate governance.

The Rising Importance of Corporate Governance in Contemporary Business Environment

1816 words - 7 pages relationship, in a market economy, between corporation owners and corporation managers………..and those who invest resources in the corporation". The term corporate governance has come to mean many things. It describes:The process by which companies are directed and controlledThe encouragement of companies compliance with codes of good practice and ethicsA field of economics, which studies many issues arising from the separation

Legal Regulation of Corporate Governance in the Role of Auditors

2552 words - 10 pages role of auditors, and illustrate some gaps in the regulation with examples. In addition, a few recommendations are given accordingly for changes. 1. Legal Regulation of Corporate Governance in the Role of Auditors 1.1 CLERP 9 reforms CLERP 9 reforms largely employed the law reform recommendations in the Ramsay report to address the audit independence controversy. CLERP 9 has significantly changed the way that audit work is carried out in

Corporate Governance and Separating the Board Chairperson from the Chief Executive Officer

1853 words - 7 pages consistent with the implications of the normal succession theory’. Conceptualizing CEO duality as a double-edge sword, researchers have drawn two conclusions: 1) Research on corporate governance may benefit when potentially contradictory theories on organizations and agency relations are considered simultaneously . 2) It is especially important that researchers investigating corporate governance recognize that CEOs and boards do not always have

The relationship between corporate governance and earnings quality of Hong Kong listed company

1779 words - 7 pages Topic: The relationship between corporate governance and earnings quality of Hong Kong listed companyBackgroundCorporate governance means the relationship between the company's management, board of directors, shareholders and other persons associated with the business interests. Meanwhile, corporate governance also provides a system to allow bodies to set goals, develop strategies to achieve goals, and monitoring bodies' performance. That is

'To what extent has corporate governance reduced the separation of ownership and control?'

2837 words - 11 pages Quadrilateral, Malla Bhasa, Corporate Governance, Vol. 4, number 4, 2004, p.9)Management who adopt this self interested approach often only regard themselves with a short-termist approach to management. Their motives for this lies within the manner in which they are rewarded for their results. Management is often only rewarded for short-term achievements, so it seems obvious that they will perform to match this. Therefore there is weight to the notion

Corporate Governance in annual reports. Includes Shell, Ahold, Philips and the new CG-rules in the Netherlands (Commission Tabaksblat)

4873 words - 19 pages addition, the Investor Responsibility Research Centre, along with corporate governance watchdogs like the Corporate Library and Governance Metrics provide governance performance ratings.While new regulatory proposals and rating systems are valuable to investors, they are no guarantee that companies are well run. Investors need to evaluate corporate governance for themselves. Here is a quick list of key issues for investors to consider when analyzing


1494 words - 6 pages In this paper, an analysis of how the failures in financial engineering and Corporate Governance have been closely related with the recent Global Financial Crisis is carried out. The Real Estate Bubble in 2006 leaded to the Subprime Mortgage Crisis in 2007 which expanded from the United States to the whole world generating the biggest financial crisis since the Great Depression of the 1930s. There are multiple factors that originate a crisis

Corporate Partnership Advantages with the Big Brother's Big Sisters Organization

854 words - 3 pages has been statistically proven to help stimulate the lives of America's discouraged youth.There is an increased pressure with companies to disperse back some of the money that the community had allotted into the business, back into the local communities. Corporate Social Responsibility is the obligation of businesses in making choices and initiating actions that contribute to the welfare and interests of society as well as to the organization

Illustrate the notion of corporate ethics put forward by Dempsey with one recent example from the corporate world

1508 words - 6 pages socially responsible corporate performance. That is if the businesses are following the rules and conduct of corporate ethics they will have an improved financial performance, enhance brand image and reputation, increase sales and customer loyalty, Reduced Regulatory Oversight of the corporate bodies, improve in Proliferation of Codes, Standards, Indicators and Guidelines and increase in Convergence of CSR and Governance Agendas.In the economic realm

Similar Essays

The Balanced Scorecard & Problems Of Financial Measures

3028 words - 12 pages measures how and why the Balanced Scorecard overcome those problems actually used in Westpac company.This report overviews our design and implementation of a Balanced Scorecard specifically to the client based on those problems in WestpacThis report also discusses the impact on human behavior with the implementation of Balanced Scorecard. Its able to explore how people most likely to react and why they behave in that particular way (both positive

Research On The Importance Of Corporate Governance

2130 words - 9 pages corporate world? Corporate governance provides with a well balanced framework of accountability; it ensures transparency in the disclosure of financial information by companies. McDommel and Johnston state in their article that the global financial crisis was partially responsible to governance practices at the time; “the inadequacies of the existing regulatory regime” forced regulatory and governance bodies to take further action in redevelopment of

The Role Of Ethics In Corporate Governance

1743 words - 7 pages and the behavior of business”. Corporate governance theories There are three conventional corporate governance theories. A) According to Nicholas, Agency theory is a theory that was introduced by Alchan and Demsetz (1972) and further developed by Jensen and Meckling (1976) (Nicholas et al, 2012). The article further states that agency views organizations as “sets of explicit and implicit contracts with associated rights”. The contract as

Corporate Governance: The South Pacific Stock Exchange

674 words - 3 pages Introduction The South Pacific Stock Exchange (hereafter SPSE) also adopted the principle-based corporate governance code in 2009 with a view to enhance investor participation and confidence in the capital market in Fiji. The SPSE listing rules Section 6.42 require all listed companies to comply with the corporate governance code as stipulated under the Reserve Bank of Fiji (hereafter RBF) corporate governance principles and reporting