Developing a good Corporate Governance Strategy


Corporate governance is concern with the mechanism which is used to maintain balance between companies and economy. It is basically arrangements or laws used in decision making for an organization.

What is Strategy?

Strategy is basically a planning for answering only one question that How to survive in market? Or we can say that it is related to answering following three questions:-

What is the position of organization in market?

Where does organization will stand after a period of time?

How you take it away from present situation to the desired one?

The only sustain answer of this following question is that, a full blow action plan which can solve the all above problem .Which is known as strategy. So we can say strategy is a most reliable recipe for the growth of company. Strategy is related to decision making for achieving the targets considering customers satisfaction. A manager wants to improve the financial performance and long term achievement for organization, which is managed by strategic planning.

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Most frequently used strategic approaches for building strong customer loyalty:

Low cost provider strategies': Achieving the lower cost than the rivals can grip the market very fast example of this is Wal-Mart and Southwest airlines, they adopt the low cost strategy and competitor Kmart have struck out.

Differentiate in quality, selection choices, performance: If I have to choose one object having the same price than I'll consider their qualities , reliabilities and other issue so this is the second thing customers go with if there is slight difference in their prices.

Rapid changes: As to satisfy customers company needs to make changes in look and feel taste and improving its quality time to time there are many company follow this like -Mac fee software in virus protection continuously releases its new versions.

Expertise in their work: If you have goodwill of your work in market than you can ask for your own decided money and customers pay. For example Walt-Disney has very good expertise to manage park and entertaining family. There are many others example too which have expertise in their work and very popular among their customers.

Approaches that defines a company's strategy?

We can identify strategy used by an organization by its actions. Which is as follows-?

Company revenue and earnings from new business by the company.

Action which can strengthen its competitive weakness.

Actions that approaches key things like - marketing, advertisement, finance, R&D.

Action to strengthen company to merging in another company.

How to utilize strategy perfectly?

There are some points through; we can check that we are going with right strategy or not-

Is the strategy that we are using is sustainable for company?

Is it really useful?

Will by using this we improve our past results?

The Emirates nuclear energy corporation before set up they decide their strategy according to their energy that they can produce and row material they will get, all is set by planning that comes in form of strategy. (Strategy)

Overview of Business

UAE official analyze the growing demand of electricity by 2020, they reviewed the viable market of energy generation & decided to step in such an efficient, reliable & environment friendly mean of generating electricity. Initially they decided to produce electricity by flammable liquids like crude oil or diesel but it would not only cost high but also contribute in the degradation of environment severely. Another option in front of them is the productions through coal in fact this also have the same problem with environment degradation but economically it is cheaper than crude oil/diesel. On evaluating they found that even on aggressive production through coal they can meet only 6-7% of their demands by 2020.

Based on the future energy security & UAE economy, nuclear power generation comes up as a commercially competitive and more environmental friendly. On this note UAE establish nuclear organization "Nuclear Energy Program Implementation Organization (NEPIO)" with recommendation of International Atomic Energy Agency. This organization works on peaceful Nuclear Program to extract maximum benefit for the citizens of UAE.

Policies decided by the UAE government for peaceful civilian nuclear activities:-

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Government is responsible for Operational Transparency

UAE government is committed to pursue highest non-proliferation standards.

Government is responsible for safety & security standards.

The government work directly with IAEA and can comply to establish peaceful nuclear program.

UAE can develop nuclear program with the firm or government of other nation or with assistance of other expert organization.

UAE government can start any peaceful program that can assure long term sustainability. (Policy of the United Arab Emirates)

Mission of the organization:-

Al Hammadi, chief Executive of ENEC said that they work on the safe culture to provide electricity to the UAE people. This program is not only for the generation of electricity but it will also create employment opportunity for the youth. (Today's new Stories)

Business Activities:-

Plant was established at Al Bayyaa. It was built in three phases; first phase will get completed by 2017 followed by second phase in 2018 and 2019. Each phase will have the capacity of 1,650 MW with total capacity of 5000 MW. Advisory contract was awarded to CH2M Hill and Thorium Power for implementation of UAE's Nuclear programmed. In April 2008, government of UAE prepared policy after consultation with government of Russia, France, and South Korea, United States, UK, China, Japan, Germany. (Nuclear Power Industry News(Blog))

Creation and composition of the Board of Directors

In general the board of organization is composed as:-

Chair person- it is generally a person one who is closely related to the management skills, often a CEO play this role.

Vice chairman: The person one who is responsible for all duties in absence of chairman.

Committee chair: Other board members which is from public relations, Audit, Ethics etc.

Treasurer: Person who is responsible for whole company's finance.

Secretary: One who forward's the minutes of meeting to all.

Board Members: Those who attends the meeting.

Keeping all points in mind Board of Directors is created.

How decide the number of members?

The number of member decided by the company's size if it is big than number of member is more if it is of small size than responsibility is taken over by member means single member can play multiple roles.

Creation of required and relevant governance committees

The purpose of governance committees is to help the directors to make relationship with

Corporate governance policies.

Recommendation of members for committee.

They perform their duty according to written in charter and some more duties on stock exchange rules and governing rules. (governance)

Roles of CEO and CFO

The CEO (chief executive officer) of any company or organization needs a CFO (chief financial officer) one who can manage or make help to CEO in manage business, strategic planning and many work related to planning and implementation. CFO is the right hand of CEO they have very close relationship.

CFO is the first person to whom a CEO reports. CEO has the ultimate responsibility to hold all managerial skills. CEO can directly report to board of directors. CEO has all the responsibilities to appoint different managers and appoint management person. The whole responsibilities of an organization are carried by CEO.

Organizational structure reporting to CEO

Above chart specifies how in an organization report forward to the CEO. This shows how to flow of information takes place to bottom line to top.

Things to be consider by senior management for reflect strategic priority

Strategic planning determines that how company will grow in future and achieve goal or not. The process of organization strategic planning depends on department. Planning is develop and implemented by the top level management.

There are few things which to be adopt by senior management:-

There should be conduct scanning or review of planning.

Increasing of compensation and appreciation for bottom level employee.

Analysis of conclusion.

Consider previously used strategy and review it.

Specify result for specific goal.

Design work plan with time limit.

As such there is no strategic planning which works always, different people have their different- different strategic planning so its depends how your planning works. (Basic strategy)

How remuneration of CEO decides?

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The board of directors decides the compensation for the CEO. The pay of CEO is divided into two parts:

1. Rewards -which depends upon the growth of company and achievements?

2. Salary - It is fix amount on which the person is contracted.

All is also depends on size of company also. (ceo-pay-salaries-compensation.php)

Stake Holders

Before knowing about stakeholder you should have knowledge about the key term "Stack". So first we will focus on key term "Stake":


By dealer or an investor either owed or owned the amount of security is called stack. Stack is also called position. (Stake)

Stakeholders are the key people in every organization and organization has to keep them in focus when plan or work on any strategy. The main stakeholder are the buyers they can be customer or from any organization. For the organization there is pressure to meet the expected target in the profitable way is must. Stakeholder can be differentiated in two ways - Direct & Indirect.

Direct stake holders can be board of directors, employee, supplier, shareholders & customers bur in direct stakeholders are the stock market, government, competitors as they are also affected by the strategy & plans of the organization. (Organisational Stakeholders)

High Level International Advisory Board (IAB) was established by government of UAE in addition with other measures & policy. International Advisory Board was formed to ensure that Nuclear Energy Program offers high level of safety, non-proliferation & security. International Advisory Board Issue regular but meet twice a year to present their recommendation & findings. Members of IAB:-

Dr. Hans Blix - former Director General of IAEA

Mr. Jacques Bouchard - former Chairman of IV International Forum and special adviser to France's CEA (Atomic Energy Commission)

Dr. Kun Mo Chung - X Minister of Science and Technology, South Korea

Ambassador Thomas Graham - former Ambassador of US for Non-Proliferation

Mr. Takuya Hattori - Japan Atomic Industrial Forum, President

Lady Barbara Judge - Former Chairperson of United Kingdom Atomic Energy Authority

Dr. Mujid Kazimi - Professor in Massachusetts Institute of Technology of Nuclear and Mechanical Engineering

Mr. Jukka Laaksonen - Director General of Nuclear Safety Authority and Finland's Radiation

Mr. John Rose - Chief Executive, Rolls-Royce (1st NATIONAL REPORT ON ENEC)

In 2010, for financial aid Emirate Nuclear Energy Corporation was in negotiation with four banks for Nuclear Power projects. During initial stage of Emirates Nuclear Energy Corporation KPMG was decided to be as financial advisor but then they plan to select another financial advisor too. In the race of second financial advisor there were four banks in race HSBC, Rothschild, Citigroup, BNP Paribas. Recently HSBC and Credit Suisse are in the financial advisory board of Emirates Nuclear Energy Corporation. They appointed Norton Rose as their Legal Advisor in July 2010. (ENEC - Nuclear Power Plant )

Governance priority in addressing key needs of each stakeholder group:

What to Cover?

When any firm develops a list of benefits and costs for stockholder group after that they determine the total impact of innovation group. Subjective determination is an important thing should be understood by every firm whether any firm wants to understand or not. They should have knowledge about introduction of innovation also. Then make a summary of important issues that are directly point out the stakeholder behavior. By doing this, it will clear that what opportunities or challenges need to point out in each group.

Where to look?

Interview- Take a review of any stakeholders interview which had already taken. This review validates the assessment of the most important issues and net impact.

Treatment- In this part we will take review of gap analysis. (stakeholder-analysis-menu)

Strategic Elements of the Firm

In nuclear power plant there are many concepts and new idea evolved after 1950's. The idea of using nuclear energy in peaceful work comes up after Second World War, when nuclear bomb used. Today as energy demand is increasing, in some countries like Japan, France they not have sufficient oil and gas resources so it's good to have nuclear energy in power generation. By using the Nuclear energy resources we can save the natural resources for future use. This is the only reason of having popular option to generate energy. Only one aspect where it can be risky is that the nuclear weapon, which should be banned. As we are developing towards more and more new technologies so we should develop advance nuclear power plant which help in deter of nuclear weapons. One option to deter is to use "Fast Nuclear plants" they are safe because they don't use the fuel cycle technology due to this nuclear weapon cannot be generated. This kind of power plant uses uranium-238. (Nuclear's Second Wind)

There were some factors which help the UAE government to make decision of generating energy through Nuclear power:-

Economy- According to economy point of view if plants are well run then they can be the most efficient producers of the energy.

Fuel supply security- Plants can run for 18-24 months on single source of fuel so they proved to be most efficient source of energy.

Environmental Friendly- Nuclear power plants are termed as environmental friendly as they don't emit greenhouse gases.

Industrial Development- Plant not only helps in generation of electricity but also helps in the industrial growth of UAE, Increase jobs for youth and many more.

Human Resource- Emirates of nuclear Energy Corporation get into partnership with the FANR, Institute of Applied Technology, Khalifa University and several other universities as they know that by 2020 they need man power ranging from 2100 to 2300. ENEC ensures that Emirati men and women occupy good position in authority and they remain responsible throughout the operation of plants, commercial business and in other supporting fields.

ENEC started preparing and implementing management strategy of nuclear fuel cycle which includes its use, procurement, long and short term management so that they can schedule their plans on line by 2017. The strategy will remain in line with the guidelines mentioned by International Atomic Energy Agency. They keep updating their plans & policies before deciding any long term management.

Social Responsibility Priorities and Programs

Safety measurement and assessments should be taken before commissioning and construction of nuclear plants. Such measures should be well documented and always reviewed by the regulatory authority.

Plants should be regularly verified, inspected and tested so that their physical condition can be checked in accordance with the operational limit, national safety requirement and design. (Today's New Stories)

Emergency Plans and Programs

(NLA 49) Measures for population security, off-site and on-site emergency preparedness.

(NLA 50) coordination, preparation and maintenance of off-site emergency by regulatory authority for public safety.

(NLA 51) They were in agreement that all the maintenance and preparation of plant should be financed by the State National Budget.

(NLA 52) Before commissioning Nuclear facilities regulatory authority should verify and test all emergency plans.

(NLA 53) Employee should be ready for all emergency situations & be well aware of all emergency plans.

(NLA 54) In case of emergency FANR should be informed first so that it takes measures to save population by mitigating them to safe zone, by monitoring radioactive releases in the environment.

(NLA 55) It describes the plans & strategy to fight against the emergency condition, duties and role of individual in such a condition.

(NLA 7) FANR should corporate with the government bodies & advice them about their preparatory plans and strategies. (1st NATIONAL REPORT ON Measures taken by UAE)

Sustainability strategy for the firm

Sustainable strategy related to how a firm competes for a particular business. Sustainable strategy concern that how a firm gets advantage over other firms that are the real sustain strategy. The profit of any firm depends upon the structure that they have while competed. There are many things to be considered while maintaining sustainable strategy:-

How fast a firm is growing with competition of existing firms?

Threat by the new firms.

Threat of substitute of services and products.

Bargaining by the product provider.

Bargaining by the customers.

There are many things considered for sustainable strategy achievement like - internet, long term profit, and different plan. But overall motto is to revise and review your plan to maintain its sustainability. (firmstrategy.htm)