Components of a Successful Integrated Marketing Strategy
Integrated marketing strategy integrates relevant marketing tools to deliver similar message to a larger audience. Remember, an integrated marketing strategy is successful only when it creates awareness of a particular brand among a large number of end-users. Remember, a marketer needs to carefully blend and make the best possible use of all promotional tools so […]
Customer Loyalty Breakers
When customers end up his relationship with suppliers, he breaks the loyalty with him. Following are the reasons which are responsible for loyalty break ups: Customer dis-satisfaction: Customer dissatisfaction is the primary reason that results in breaking up the continued loyalty with the supplier. Most of the unsatisfied customers try to find more prominent alternatives […]
Strategic Management – Meaning and Important Concepts
Strategic Management – An Introduction Strategic Management is all about identification and description of the strategies that managers can carry so as to achieve better performance and a competitive advantage for their organization. An organization is said to have competitive advantage if its profitability is higher than the average profitability for all companies in its […]
Integrated Marketing Communications – Meaning and its Components
It is essential for organizations to promote their brands well among the end-users not only to outshine competitors but also survive in the long run. Brand promotion increases awareness of products and services and eventually increases their sales, yielding high profits and revenue for the organization. To understand integrated marketing communication, let us first understand […]
Customer Acquisition Cost
Customer acquisition cost is the cost which suppliers invest to acquire a new customer. This cost should be always less than the overall value of customer in the entire customer life-cycle. For example, if the cost incurred to acquire a customer is $10, but the contribution of the customer to the profit is only $9 […]
With the explosion of scandals pertaining to corporates due to mismanagement and fraud in recent years, the regulators all over the world have been implementing a series of policies aimed at improving corporate governance and ensuring that companies follow ethical and normative rules of business. A part of this initiative has been to goad the companies to nominate a certain percentage of their board to persons who are not affiliated to the company. These are the so-called independent directors who sit on the boards of companies in a purely professional manner without having a hand in the day to day running or other activities of the company.
The point about the independent directors is that they are drawn from a pool of professional who have had wide industry experience and are qualified to sit on the boards of the companies. What makes this process appealing to the regulators is that these independent directors can bring the much needed perspective that is objective and balanced since they are not connected to the company nor its management and hence do not have hidden agendas.
In India, SEBI and the Corporate Affairs Ministry have decreed that between 10-15 percent of the composition of the board must be made up of independent directors. This move is aimed to bring in more objectivity to the art of corporate governance and introduce transparency and accountability from the directors who are drawn from the ranks of the management. This rule has been enforced given the spate of corporate scandals like Satyam where the top management itself indulged in fraud and dubious business practices. So, the line of thinking goes that bringing in independent directors would usher in greater oversight over the functioning of these companies. Since the Satyam Scandal was because of the board looking the other way when its founder was indulging in defrauding the company, the Ministry of Corporate Affairs is implementing this rule to introduce greater oversight.
In the US, independent directors have been known to bring in a fresh perspective as well as check the runaway business behavior dictated by profits and personal benefit. In many companies in the US, the independent directors are the ones who often thwart the management from taking decisions that are based on personal benefit as opposed to the interests of the shareholders. Further, independent directors are tasked with investigating cases of corporate malfeasance and unethical behavior because of their supposed objectivity. However, there have been instances where the independent directors themselves acquiesced in the wrongdoings of the companies and their boards. The solution to this has been the initiative to make the independent directors responsible for the actions of the board so that they have a stake in ensuring that the board does not tread on the wrong side.
Finally, independent directors also bring in the much needed professional expertise since they are individuals with wide experience in running companies as well as the fact that they sit on the boards of other companies which means that they are abreast of the latest happenings. There has been a move by the regulators in many countries to ensure that independent directors do not have conflicts of interest and these have been codified into rules governing how many companies they can associate themselves with and the sectors and industries that they represent.
Your email address will not be published. Required fields are marked *
Corporate Reputation Management in the Post Truth Era and the Age of Fake News
February 12, 2025
Effective Corporate Governance Has to be Practiced at all Levels of the Organization
February 12, 2025
