Case Study: War at the Helm of Elicor
Liezel R. Santosidad July 15, 2014
5BSA
CASE STUDY: WAR AT THE HELM OF ELICOR
CORE PROBLEM Paul Simon, chief executive officer (CEO) of Elicore, has drove the company on an accelerated growth since he joined the company as CEO in 1993. Along with the accelerated growth of the company, Mr. Simon's arrogance also increases which leads him to contravene board directives and abide to his own set of rules in managing the company. Thus, there is poor corporate governance which then results to poor internal control.
GUIDE QUESTIONS
1. Discuss the OECD principle on the responsibility of the board. How did the Board fare against the principle and what areas need to be improved? Why? Primarily, the board of directors is responsible for guiding, controlling and monitoring the company with the best interest of the company and its stakeholders in mind. The OECD principle on the responsibility of the board states that the board should fulfill key functions such as guidance, governace and oversight of the company's management, operations, conflicts and accounting and financial reporting systems. The board should also be able to provide objective independent judgment regarding corporate affairs. Elicore's board of directors fared against the principle on the rsponsibility of the board by failing to implement good corporte governance. The board was passive on their duties and responsibilities. It did not bother to act on issues arising from Mr. Heaths, chairman of the board, and Mr. Simon's tensions during instances wherein Mr. Heath makes an effort to be proactive with regards to the company. The board should make room for improvements on implementing good corporate governance. The board members should become objective, capable and inquisitive in order to be effective. They should also be fully informed of the company's activities, and commit themselves in fulfilling their board responsibilities. This is because, for instance, management may be in a position to
5BSA
CASE STUDY: WAR AT THE HELM OF ELICOR
CORE PROBLEM Paul Simon, chief executive officer (CEO) of Elicore, has drove the company on an accelerated growth since he joined the company as CEO in 1993. Along with the accelerated growth of the company, Mr. Simon's arrogance also increases which leads him to contravene board directives and abide to his own set of rules in managing the company. Thus, there is poor corporate governance which then results to poor internal control.
GUIDE QUESTIONS
1. Discuss the OECD principle on the responsibility of the board. How did the Board fare against the principle and what areas need to be improved? Why? Primarily, the board of directors is responsible for guiding, controlling and monitoring the company with the best interest of the company and its stakeholders in mind. The OECD principle on the responsibility of the board states that the board should fulfill key functions such as guidance, governace and oversight of the company's management, operations, conflicts and accounting and financial reporting systems. The board should also be able to provide objective independent judgment regarding corporate affairs. Elicore's board of directors fared against the principle on the rsponsibility of the board by failing to implement good corporte governance. The board was passive on their duties and responsibilities. It did not bother to act on issues arising from Mr. Heaths, chairman of the board, and Mr. Simon's tensions during instances wherein Mr. Heath makes an effort to be proactive with regards to the company. The board should make room for improvements on implementing good corporate governance. The board members should become objective, capable and inquisitive in order to be effective. They should also be fully informed of the company's activities, and commit themselves in fulfilling their board responsibilities. This is because, for instance, management may be in a position to