Corporate Governance and social responsibilities Essay

Corporate Governance and social responsibilities - Essay Example This began in the 1980s when the company put in place structures to check the sources of its funds and how the funds are spent in a transparent and accountable manner. This paper will discuss the extent to which the Coca Cola Company has incorporated corporate governance principles and social responsibility practices into its operations and how effective these strategies have been in fostering the growth of the company in the highly competitive soft drinks industry. Introduction Corporate governance refers to laws, processes and guidelines that a business is controlled, regulated, and operated in. The directors of Coca Cola have laid out factors that have led to improved corporate governance. The Coca Cola Company has been committed that guide corporations in dealing with that govern corporate governance. Corporate governance has been enforced by the shifting attention to high and risky profiles that have shifted the debate on corporate governance. In many cases the coca cola company has been faced with lawsuits from both the customers and employees over their operation errors. Rubach and Picou (2004, p.24), the role of corporate governance has been linked to the economic and social elements arising from the company activities. The Coca Cola Company has adopted the balance theory that sates that the company must find a balance between its internal activities and the activities of external shareholders. The relevant stakeholders that the coca cola company takes in consideration include shareholders, employees, competitors, suppliers and customers. The most relevant stakeholders that determine corporate governance include the shareholders. The institutional theory states that it is that role of the directors to maximize... The objective of this research is to acquire a better insight of corporate governance principles and social responsibility practices using the Coca Cola Company as an example. The Coca Cola Company has adopted the balance theory that sates that the company must find a balance between its internal activities and the activities of external shareholders. The relevant stakeholders that the coca cola company takes in consideration include shareholders, employees, competitors, suppliers and customers. The most relevant stakeholders that determine corporate governance include the shareholders. The institutional theory states that it is that role of the directors to maximize shareholders value because they are the owners the corporation. Davis asserts that the most important corporate governance policies seek to put an institution on more non financial perspective as opposed to the traditional institutional governance. Traditionally, governance of corporations was based on the sole objective s of profit maximization and cost minimization. Since its foundation, Coca cola has practiced traditional governance in its management but the directors in the 1980s came to realize that an organization of Coca Cola’s caliber could not operate on finances alone but the ways in which the finances are generated and used. The main areas that the directors of the Coca cola company have a focused on include endorsement of corporate governance in the company, parties to corporate governance , Corporate governance guidelines and ownership and structure in order to ensure good corporate governance.