Corporate Governance MBA (Metlife)

Corporate Governance MBA (Metlife)
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Corporate Governance MBA (Metlife)
Introduction 3who is MetLife Inc.? 3Company Ratings 4Corporate Governance Defined 4 Corporate Governance Framework For A US Corporation 5 Conformance 6Performance 7 Review Of MetLife Inc.’s Corporate Governance Framework 8 Review of MetLife in relation to corporate governance framework 8 Board structure and size 8 Auditing and Risk Management 9Principles Of Corporate Governance By Commission On Corporate Governance 10Strategies, Policies And Planning 10Corporate Social Responsibity 10 Recommendations 11 Conclusion 12References 13-14
Introduction
Corporate governance is the term that is used to refer to a set of systems, processes, and principles that are used to govern a company. The systems, principles, and the processes provide the necessary guidelines concerning the management functions of controlling and directing to ensure that the company meets its goals and objectives. The corporate governance should also be structured in a manner that ensures that it is of additional value to the company and it benefits the stakeholders in the long term. This includes the top management, board of directors, shareholders, employees, customers, as well as the society. This paper will look at the structure, effectiveness, and the process of governance of Metlife. This will be followed by making various recommendations on the various areas that require improvement.
The Corporate governance is guided by various principles that include conducting the business with fairness, transparency in all the transactions, disclosures, and decisions. It is also based on a principle of compliance with the various laws of the land, responsibility, accountability, and commitment to the stakeholders, as well as in conducting business in an ethical manner. It also calls for those who are in control to differentiate between the personal and the corporate funds in running the company (Baxi, & Prasad, 2005, p20).Who is MetLife Inc
MetLife Inc. is a company that has been in business for well over 139 years. It is among the largest providers of employee benefit programs, insurance, as well as annuities. The company provides employment for well over 60,000 people and has a customer base of over 90 million consumers cutting across 60 different countries. It has thrived successfully in the global market due to the various strategies and that have been put in place (Allesio ,2010, p81).
The company has been socially responsible in the several years that it has been in operation and it also has an effective leadership team. The company has made well informed investments and it has also been providing innovative and creative products to its consumer base. MetLife Inc. has been successful in the insurance sector boasting with over 400 trillion dollars worth of insurance protection. The company also has around 450 billion dollars worth of assets that they manage. This plays an essential role in financing the businesses, as well as their community projects among others. The company offers its services to around 95% of the top 100 fortune 500 companies in the U.S (Brian, 2011, p300). Company Ratings
The MetLife Inc. ratings have been provided by the various agencies concerned with the financial rating. This is in regard to the ability of MetLife Inc. to honor their set obligations that are stipulated in the insurance contracts and policies. The company has met most of those criteria thus it has been highly rated. The subsidiaries of the company have also been highly rated (Allesio ,2010, p81). Corporate Governance Defined
Corporate governance is the general term that refers to the rules and regulations that are drafted to govern the directors of companies. They ensure that they practice accountability, fairness, and openness in the relationship between the corporation and its shareholders. The shareholders include the clients, financiers, the government, community, management, as well as the employees at large. The rules and regulations also include the guidelines for solving the various conflicts of interest. They also cover the procedures and guidelines for effective management through various activities. This includes professional supervision, control of the flow of information, as well as separating the various roles. This plays an important role in providing the necessary checks and balances in governing the corporation.
MetLife Inc. has various types of stakeholders considering that it is a global firm that covers well over 66 countries. This includes the private corporations and partnerships, investment firms, and individual investors, as well as the government (Allesio ,2010, p81). The importance of corporate governance can therefore never be over emphasized in MetLife Inc. It helps the company to cope with the complex financial transactions that are characterized by expanding firms, as well as the ownership organization of the corporation. This is also crucial since most of the stakeholders are not aware of the methods that they can use to calculate the worth of their investment in the corporation. This situation can be capitalized by various stakeholders that lead to the loss of lifetime investments by the various investors (Mallin, 2011, p81).
Theories to Explain the Obligations of Corporate Bodies
The theory of agency indicates that the directors of corporations often tend to look after their personal interests before addressing the needs of the shareholders. The theory of stewardship, on the other hand, indicates that the directors in corporations take the role of trustees. They are expected to act as the stewards to the investments that have been made by the shareholders. The next one is the theory of resource dependency that indicates that the structures of corporations are modeled on the resources and relations that are available. There is also a theory that termed the shareholders that have been enlightened about how corporations should be run.
Shareholders have little room to influence the daily operations and management of the investments that they have made. This, therefore,calls for a system that guarantees the investors or shareholders receive the correct information concerning the business transactions made using their funds. This plays an essential role in reducing fraud and misleading information in corporations. It can be achieved by selecting various shareholders or stakeholders to represent them in the running of the corporations (Elliott, Jackson, Peecher, & White, BJ 2014, p270).
The selected members should be allowed to sit on the board to monitor various aspects in the running and transactions made by the corporation. The first aspect is to ensure that the top executives and board of directors conform to provisions of accountability, rules and regulations, as well as, the protection of shareholders. The representatives are also responsible for overseeing the various activities by the executives. These members are also tasked with ensuring that the directors are focused on good performance based on the plans for the future. They should ensure that the executives are strategic thinkers and efficient decision makers concerning the polices that will ensure the future of the company. This in turn guarantees the shareholders of an increase in the value of their money (MARTIN, 2006, p29).Corporate Governance Framework for A US Corporation
The constricted regulations in the U.S are to blame for the limited opportunities for various stakeholders to make decisions on the running of the corporations. The members of the board of directors are nominated by the nomination committee. This is done after the recommendations have been made and the shareholders are only expected to vote for the members. This indicates the extent to which the shareholders have limited space for influencing the corporations that they have invested in. Once they have been voted in, the duties of the directors are then highlighted. They are expected to act with care, diligence, in good faith, as well as function as independent parties that are responsible for representing the interests of the stakeholders and the shareholders. The position of the director and the chair is at times held by the same person. Conformance
The directors are expected to adhere or conform to the various legislative provisions, provisions, compliance with the regulations on shareholding, as well as the provisions on the supervision of the executive. Metlife is a company that has been listed on the New York stock exchange. This ensures that the directors are protected incase their actions in the duties of the corporation are done in good faith. This indicates that incase the director takes actions based on expert opinion from consultants, he is protected from taking responsibility for the results from the expert opinion.
MetLife is, however, a global company that has affiliate branches in Asia, Europe, and Africa. This requires that the company should comply with the various legal requirements and provisions that are available in various jurisdictions. This indicates that the company is in compliance with the corporate governance regulations that are applicable to the United States. The company is also required to comply with the regulations made by the SEC, as well as, those set by the NYSE. The various corporations in the U.S are required to adhere to the regulatory provisions and guidelines. The model of management in that country is that of the agency thus, the various corporations are required to adhere to the available laws. The companies that violate this regulations and provisions are subjected to various pe...