Importance of Gender Diversity in the Corporate Offices
1. Gender diversity is a fair or unbiased representation of the genders. It mostly refers to the equal ration of women and men. The gender diversity of the corporate offices have been discussed widely. There have also been regular initiatives that promote the concept of gender diversity in various conventional fields that are dominated by men including the heavy industry, science and medicine (Armstrong et al. 2015). As stated by Cornelius (2005) achieving gender diversity within the organization has various benefits for the business that may also lead to long term profits. Having a diverse situation in respect to genders can also improve the reputation of the firm as well. There are several companies which have failed to incorporate gender diversity in their organizational culture, such as Enron, HIH, Worldcom, and Sunbeam. These companies do not have many female members in their board of directors; rather they have more male directors. The female directors of these companies are mostly non-executive directors who cannot take independent decisions. However, on the other hand Medibank Private Limited has successfully shaped their organizational culture by incorporating a successful diversity and inclusion policy. The organization believes that everyone is different; therefore it values the difference and considers it as the strength of the company. Furthermore, recommendations for the company on the Australian Stock Exchange are listed below:
- The organization should find the gap between having gender diversity in the organization and the existing situation; therefore it will help the management to narrow down its area of working.
- The organization should also look for a specific skill set amongst the employees and they should not discriminate on the basis of gender once they find those specific skill sets in any employee.
- For the next three to five years the company should fix the criteria of being a board member and should adhere to the criteria.
- For the application and selection procedure, the company should decide on certain criteria and should not bias based on gender.
2. As stated by Love and Rachinsky (2015) the basic principle of corporate governance is facilitating the entrepreneurial, effective and wise management which is competent of delivering a long-standing success for the company. The corporate governance practices include a definite framework including the legal codes, legislation and the voluntary practices. The major reason of incorporating corporate governance into the organizational practices is to protect the interest of the shareholders who are not staying close with the management. Along with that this practice also considers the interests of the customers, employees, suppliers and the other ones who are having a direct interest with the company. The Stakeholders theory of corporate governance states that the business ethics and organizational management should address the principles and morals in managing the organization (McCahery, Sautner and Starks 2016). This theory states that the management should also consider the interest of all the involved stakeholders, not only the interests of the management or the directors. However, it has also been viewed that adhering to the corporate governance sometimes tend to slow down the decision making process and also creates hindrances for the creativity and innovation in the business practices. The innovative and creative practices of the business deals with different products and service, therefore it is also associated with the stability of the company (Peni and Vähämaa 2012). Therefore the organization may have hindrances in its goals and milestones if they have to stick to the corporate governance policies. The recommendations for such situation are:
- The company should have a risk committee that will take care of the forthcoming risks of the company and help minimizing them.
- The company should always understand the budget of the project. It should always maintain the budget, therefore if adhering to the corporate governance policies exceeds the budget of the project, it should extend the budget or compromise with the policies.
- The company should also have definite plans for achieving the milestones. Therefore the corporate governance policies should align with those as well.
Achieving Gender Diversity within the Organization
3. The corporate governance takes care of the wealth of stakeholders and the interests of the stakeholders. Within the broader perspective, the perception of corporate governance also considers the welfare of the society and the stakeholders. The ethics is considered to be a part of philosophy and normative science as it is mostly associated with the norms of the human conduct. It is also a concept that defines that the actions ate moral or immoral. In the business perspective, the ethics is the discipline of applying the ethical principles for evaluating and solving the moral dilemmas (Tricker and Tricker 2015). A certain business is only considered ethical while it tends to create a balance between its financial objectives and the social obligations. Within a business environment the ethics prevents the company from getting trapped in any kind of fraudulent activities (Love and Rachinsky 2015). Therefore, the ethical implications of the company would be:
- The company should have an internal control, especially on the quality of services and goods that are being supplied to the consumers.
- There should also be a whistle blower committee of the company which will inform the management if there are any complications.
- There should not be any system of bribing.
- The ethical implications should also be aligned with the company policies so that there is no damage of the brand reputation.
The ethical implications of any organization treat the external and internal people in an appropriate way. For example, the organization Whistle Blowers had been accused of taking bribes which has affected its brand image. This can also be considered as a corporate failure. On the other hand, Lendlease has taken effective steps for ensuring whether anyone is bribing the Australian vintage.
4. The venture capital funds refers to the investment funds which manage the investors’ money who tend to seek the private equity stakes for the small sized organizations and startups with adequate and strong potential for development. The venture capital firms are mostly associated with the joint ventures, SME (small to medium sized enterprises) and start ups. The recent focus of the SMEs has changed to a great extent (Tricker and Tricker 2015). In the previous times, the focus was entirely on the families whereas now the focus is frequently on the qualified managers. Therefore the best corporate governance practices for the venture capital funds will be:
- The investment funds should define the focus of the enterprise. The strategies should relate to hiring the qualified managers.
- There may be lack of controls in the business practices; however the company should improve the efficiency of the managers and the quality of products and services.
- If there is any lack of skills, especially in the sales, accounting or IT departments, the company should take immediate actions to it.
- If there is any lack within the succession planning, the company should focus on building new set of skills.
- The roles and responsibilities of the stakeholders should be preserved.
5. The corporate governance has been emerging as a significant issue as the global investment is enhancing gradually, therefore it is providing a assurance of the market integrity and building the market confidence (Van Grembergen and De Haes 2017). The regulatory oversight and the prescriptive rules are increasing at the same time; therefore the corporate governance has been emphasized to a great extent. The OECD principles of the corporate governance states that:
- Making sure that there is a framework for corporate governance
- The shareholders should be treated equally. This framework should also protect the stakeholders and ensures that the rights of every stakeholder are preserved including the foreign and minority ones.
- The corporate governance framework should be able to provide adequate incentive round the investment, therefore in this way the stock market can function. The functions of stock market also contribute to a good corporate governance practice.
- The framework should also identify the specific rights of every stakeholder which has been already established by the legislation or any kind of mutual agreement. Therefore this framework should also help the stakeholders by creating adequate jobs, wealth and a sustainable and financially capable organization.
- The framework should be capable of ensuring that the organization makes an accurate and timely contribution to all the materialistic matters involving the economic situation, ownership, performance and governance of the particular company.
- It is also a major responsibility of the framework to make sure that the strategies of the company is well planned. It should also take care of the effectual monitoring of the plans by management and the responsibility of the organization and concerned stakeholders.
6. The corporate social responsibility is the ‘…the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce, their families and the local community and society at large.’ The company should always set goals which are measurable; therefore it would be easier for the company to align its strategies with the CSR policy. As the CSR policy is mostly concerned with the interests of the stakeholders, therefore the first priority should be protecting their interests and engaging them in the CSR strategy. The company can also utilize mapping the sustainability; therefore it would help them to prioritize specific issues. For example, a famous Indian organization, Adnani Company that produces power for the Indian community had few issues with their CSR policies. The activities of the organization were creating environmental issues as the coal was polluting the water and the community was not happy. Therefore in such situation, the government has to take strict initiatives against the company. However, the company should protect itself from any such issues and implement strategies that adhere to the CSR policy of the company. There should be separate annual reporting of the adherence to CSR policies which will collect achievable and accurate. There should be internal and external targets which will be divided by the workforce and area of working.
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Dimopoulos, T. and Wagner, H.F., 2016. Corporate Governance and CEO Turnover Decisions.
Fender, R., Adams, R., Barber, B. and Odean, T., 2017. Gender Diversity in Investment Management: New Research for Practitioners on How to Close the Gender Gap. Research Foundation Publications, 2017(1), pp.37-38.
Love, I. and Rachinsky, A., 2015. Corporate Governance and Bank Performance in Emerging Markets: Evidence from Russia and Ukraine. Emerging Markets Finance and Trade, 51(sup2), pp.S101-S121.
McCahery, J.A., Sautner, Z. and Starks, L.T., 2016. Behind the scenes: The corporate governance preferences of institutional investors. The Journal of Finance, 71(6), pp.2905-2932.
Nanda, S., 2014. Gender diversity: Crosscultural variations. Waveland Press.
Peni, E. and Vähämaa, S., 2012. Did good corporate governance improve bank performance during the financial crisis?. Journal of Financial Services Research, 41(1-2), pp.19-35.
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Van Grembergen, W. and De Haes, S., 2017, January. Introduction to IT Governance and Its Mechanisms Minitrack. In Proceedings of the 50th Hawaii International Conference on System Sciences.
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