Title: Corporate Governance
Conduct a review of the governance of your organisation (or one with which you are familiar) in the form of a report to the Chairman (or President) of the Governing Board of Directors. In the brief report use the concepts, tools and techniques learned in this subject to review the structure, process and effectiveness of the governance of the organisation and make recommendations for appropriate improvements. Executive summary
This report sets out to review corporate governance at a private company, namely, Paramount Insurance Company. The specific objectives were to identify the relevant codes the organisation follows, why they are important and review the structure, process and effectiveness of the governance of the organisation. Throughout the report, it was evident from the findings that Paramount although once a successful organisation, had some governance issues that can and should be improved for the best interest of the company and its policyholders. Finally, several recommendations for improvement of the organisation’s governance were outlined.
Table of contents
Definition of corporate governance7
Composition and criteria at Paramount8
The Chairman and the Chief Executive Officer8
Diversity of board members8
Appointment to the board and subcommittees9
Board performance evaluation10
Corporate Governance has evolved from the early days of merchants and monopolists and the concept of corporate governance is as old as trade but the phrase is new. (Tricker 2011).At its simplest, corporate governance can be regarded as being ‘about promoting corporate fairness, transparency and accountability’ (Wolfensohn 1999). All corporate entities need governing however, good corporate governance that takes into consideration a variety of frameworks, including various perspectives such as the relationship, stakeholder, financial, and societal. This report will review the corporate governance policies of Paramount Insurance Company Limited ("Paramount"). Firstly I will supply an overview on the company’s profile and define corporate. Then the report will look at the composition and criteria for the Board of Directors of Paramount and demonstrate any corporate governance issues that the company may be facing. Finally recommendations are given for modifications or improvements in the company’s practices relevant to this business.
Paramount was an insurance underwriter predominantly writing motor business for individuals in the United Kingdom. Based in Watford, Paramount Insurance Company Limited ("Paramount") wrote motor insurance over a period of around forty nine years until May nineteen ninety six when it ceased underwriting. Initially, the company primarily provided motor package insurance, that later expanded into also writing some legal expenses cover. Paramount was incorporated in Guyana and therefore the company complied with the Insurance Act 1998 and the Companies Act 1998 of Guyana. These acts provided a guide to Paramount along with the Guyana Corporate Governance Code (GCGC) to some of its corporate governance practices. The Corporate Governance Code of Guyana is not mandatory or enforceable but simply provides a list of principles for best practice. Throughout this report, it is evident that Paramount has a number of issues in relation to corporate governance. This eventuated with issues for policyholders as was estimated that there may be 40,000 current policies at the time of the provisional liquidation. Definition of corporate governance
The term "governance" is derived from the Latin "gubernare" which means "to lead", suggesting rather that "the governance" (Corporate, in this case) implies more the steering function than the control one. BALC et al. (2013, pp. 14-17). Corporate governance has many definitions as it is often used...
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