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Risks Of Non Compliance In Corporate Governance

2295 words - 9 pages

Risks of Noncompliance PAGE \* Arabic 1
Running head: RISKS OF NON-COMPLIANCE IN CORPORATE GOVERNANCERisks of Non-Compliance in Corporate GovernanceRisks of Non-Compliance in Corporate GovernanceCorporate governance describes the broad set the rules, processes, or laws in which mandates controls for select businesses. In some cases, it clearly defines the parameters of businesses' operation, regulation, and control. According to Tech Target, "A well-defined and enforced corporate governance provides a structure that, at least in theory, works for the benefit of everyone concerned by ensuring that the enterprise adheres to accepted ethical standards and best practices as well as to formal laws…" As a result, organizations are expected to develop an organizational structure and processes to ensure full compliance with all policies. Non-compliance with the prescribed policies, practices, and processes could create legal and ethical issues. It has the ability to comprise the organization and all its stakeholders. The ramifications can have short and long term affects on the viability and sustainability of the organization. Similar to McBride, other organizations have faced issues because of the lack of attention they have given to corporate governance. Trident Microsystems, Affiliated Computer Services, and XTL Biopharmaceutical have also experienced incidents of non-compliance of organizational and governmental mandates. This paper will briefly describe the non-compliance issues faced by these organizations and how they addressed them.Carolyn Ayers: Trident Microsystems, Incorporated - Non-Compliance Risk and Special Litigation, Compensation, Nomination, and Governance Committees.After the implementation of the Sarbanes-Oxley Act (SOX) of 2002, "corporations are empowering audit committees, adding financial experts to their boards such as CPAs, enhanced financial whistle-blowing capacity, and improved corporate transparency in financial statements and shareholder disclosures. Good corporate governance is a part of good risk management plan. Providing the tone for the organization from the top that brings problems and issues to light so that they can be addressed promptly" (Causey, 2008. p. 50). In minimizing risk, an organization must first have a knowledgeable board, which assists in guiding the organization's strategic plan for effectively managing risk. Many organizations are stepping up efforts to tighten corporate governance, including a strategy review of executive compensation and expensing stock options for the executives."Trident Microsystems, Inc. of Santa Clara, CA. a leading provider of digital TV technology for the consumer digital video marketplace, is just such a company reviewing strategy polices. A Trident special committee on the board of directors was conducting an investigation of the organization's practices of stock option granting, the board believed that a conflict of interest may have arisen" (Trident Microsystems,...

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