Strategic management and Accounting Standards

The role played by top management and leaders in enhancing their organizations’ corporate governance and strategic planning

Strategic planning and organizational governance goals are some of the most important pillars that ensure an organization attains its set goals and objectives. These two aspects of management help in streamlining organization operations, as well as providing all the stakeholders and more so employees of an organization the direction that need to be followed in implementing the company’s agenda, to ensure that all the set bottom lines are attained. Papadopoulos (2016) defines strategic planning as the act of organization of management activities, to set up priorities and focus all energies and resources towards the aspects that can help the organization strengthen its position in the industry, and at the same time ensure all other stakeholders work towards attaining the set goals and objectives.

This is an enormous and essential aspect of an organization. The top management team and leaders in the organization should come out strongly to dictate the strategic planning of their organization (Papadopoulos, 2016). To attain this end, the leaders and the management team should decide the objectives that should be achieved in the organization and then come up with a strategic plan on how these goals should be attained. They should start by seeking the necessary funds to finance the implementation of the operations as well as recruiting the right and qualified staff members to help implement the strategic plan they have come up with. Proper strategic management can be beneficial to an organization because it helps an organization attain its goals efficiently and fast.

Leaders and top management team have a role to play in implementing good corporate governance in their organization. This can be attained by incorporating excellent leadership standards in their organization (Papadopoulos, 2016). These standards should be based on good organization culture and ethics that dictates that all stakeholders’ interests should be considered before making significant decisions in the organizations.

Roles and responsibilities of the board of directors in an organization

In many business organizations, the board of directors forms the highest decision-making body. The boards of directors is a group of people made up of professionals, as well as people who have a significant interest in a business. Their primary role is to supervise and make critical decisions that are made at advancing the importance of the organizations. Another critical duty of the board of directors is to establish their organization culture, strategic plan, and set priorities and directions that should be followed by the organization. This is a significant role because it helps the organization build its image (Copeland & Towl, 2008). Creating the right picture is very important to an organization, as this is what helps different stakeholders know how the organization is different from other players in the industry.  

The board of directors is also mandated to do a regular evaluation of the organization strategic plan to see if it is in line with the prevailing economic environment. They are also tasked with the duty of recruiting the CEO and other top managers in there, and they work hand in hand with these officers to ensure that the set targets and goals are attained at all times. They are also charged with the responsibility of ensuring that the organization has adequate capital to fund its operations at all times (Copeland & Towl, 2008). In this regard, this body makes major capital decisions such as getting credit finance from financial institutions and authorizing all significant projects or undertakings such as mergers and acquisition of other organizations.  An organization with a good board of directors is Apple Inc.  This board has led the organization into successes making it the most prominent organization in the telecommunication industry.

The Sarbanes-Oxley Act

It is morally and legally right for the board of directors of business organizations to report financial statements that represent the right and fair value of their business organizations. This is vital because many business stakeholders such as employees, interested investors, financial institutions, and other interested stakeholders use these financial statements to base their decisions when they want to have some dealings with the organization. However, many business organizations did not produce financial statements reflecting the true and fair value of their business organizations (Fletcher & Plette, 2008). To this end, many stakeholders relied on making business decisions based on erroneous statements, which led to significant financial losses to these parties. To protect these parties from these gross misleading, Congress established the Sarbanes-Oxley Act of 2002. This is a federal law that created sweeping financial and auditing regulations for publicly traded business organizations (Fletcher & plette, 2008). The act helped protect the public from fraudulent financial practices and many accounting errors that could lead them to make the wrong financial and investment decisions.

The Sarbanes-Oxley Act of 2002 has helped change the way business leaders conduct their business in the United States. Today, business leaders and owners are keen to ensure that the financial statements produced by their accounting and financial departments reflect the right and sound financial position of their organizations (Fletcher & Plette, 2008). This is important because if an organization reports erroneous and misleading financial statements, then the directors and business leaders are held personally responsible for the reporting.

The strategic audit helps corporate governance in that it ensures that all accounting and financial reporting standards are adhered to when the books of accounts are being done. This is vital as it ensures that the organization operates within the set rules and in an ethically acceptable manner.

References

Copeland, M., & Towl, A. (2008). The Board of Directors and Business. Chicago, IL: Wildside

Press LLC.

Fletcher, W., & plette, T. (2008). The Sarbanes-Oxley Act: Implementation, Significance, and

Impact. New York, NY: Nova Publishers.

Papadopoulos, P. (2016). Role of Currency Futures in Risk Management. New York, NY: 

GRIN Verlag.