Twelve Questions regarding the YCP Company Research Paper

Twelve Questions regarding the YCP Company - Research Paper Example 2. What impression have you found of Corporate Governance of YCP Company? Corporate Governance plays the role of sight and foresight for an organization. Particularly, in the case of YCP Company the structure possessed some basic flaws in the distribution of duties and power according to the Code of Corporate Governance. The most obvious a blunder is allocation of 60% of voting equity to Kong and Watson. Furthermore, according to the detail illustrated the absence of remuneration committee and nomination committee followed by the weak structure of Board were some of the fundamental errors of the structure of Corporate Governance. 3. What is your opinion of the ownership structure in YCP, in the light of the fact co administrators Kong and Watson retain 60% of the voting equity. Can group of small shareholders make a significant contribution to the governance of the company? What about large share holders. A diverse and balanced ownership structure is the key to keep transparency and authenticity breathing in organizational management. However, the very aspect was absent in case of YCP, the imbalance of major share owner ship and voting rights is evident error. In addition, the fact that minor share holder’s were totally neglected and the other share holders with major contribution had other businesses to look after and their presence in the administration was a mere formality. The dire need of YCP that is obvious in the structure of YCP was that of rationally designed attribution of power and authority along with voting rights based on the fact that when the voting rights of controlling shareholders exceed the cash-flow rights, the incentives for asset diversion are magnified. 4. What is your opinion of the structure of the board have had before approving the construction of the private telephone network for YCP right after the company went public The expansion planned in the very short period after establishment should been backed with strong supporting strategies. In the case of YCP the segregation of management and supervision was the seemingly lacking feature. Hence, after the registration company into the stock exchange a strong structure of Corporate Governance was the essential need of time. Furthermore, evident is the fact from the description that investment in construction was an element of the chairman’s show off rather than strategical opportunity. Therefore, the strategy of expansion on the grounds of serving ego without any exit was more an evidence of Board structure rather than mismanagement. 5. What information should the board have had before approving the construction of the private telephone network for YCP. The feasibility and relevance to the vision of the company was the main area to be focused by board in the evaluation of proposal of construction. Furthermore, funding requirements, timeline, return on investment rate, cost benefit analysis, alternative plans, competitors analysis , PESTEL analysis an d an exit plan were the mandatory analysis to be investigated by the board. Hence, the most important feature to be considered was the exploration of the potential of company to support such a gigantic project along with usual business in terms of time, efforts and resources.