Corporate Governance at Citic Pacific Case Help
Introduction
Citic Pacific is a venture organization of China. It was established in 1978. The primary reason for the initiation of organization was be the first of the change in the financial area; draw in unfamiliar speculation and innovation to China in addition, to foster worldwide business. It is well versed in assembling special steel, mining of iron mineral and the advancement of property in China. It additionally had invested in ventures like avionics, common foundation, energy and different enterprises. The company was viewed as an organization "red chip" primary; subsequently, extremely famous among foreign financial backers, who needed to be important for the economy in China impact and the exclusive expectations of Hong Kong's corporate organization.
Problem statement
The examination of this case was situated in issues like the composition of the Board of Directors, risk the board, Executive remuneration and other corporate administration rehearses.
SWOT Analysis
The SWOT analysis is used to analyze the organization strengths, weakness, opportunities and threats. This analysis will help the organization to identify its weakness and serve it as a future opportunity. In addition to assessing the organization's culture, it should also consider its future plans, such as growth strategies and new technology. Appendix 1 shows the Citic pacific SWOT analysis.
Question no-1
Risk factors
The case study of the CITIC Pacific case examines corporate governance in Hong Kong. Specifically, it focuses on the foreign exchange hedging practices, which led to significant losses for CITIC. In addition to exploring the governance structures at the beginning of the crisis, the case also discusses the new structures created by financial governance committees to effectively manage risks.
There are several risks associated with the corporate governance of CITIC. These includes the risks of lack of accountability and liquidity. The investors do not integrate corporate governance in their investment process. Among the most important ESG issues are financial performance, fiduciary duties, and non-arms-length transactions. In addition to this, investors also have to consider other factors, such as the company's corporate culture.
When it comes to ESG issues, there are some common themes across all investors. For example, health and safety are still the top ESG risks for mining companies. These issues have the potential to affect both bond prices and default risk. These issues can also affect corporate bond and foreign debt yields. But, as the world becomes increasingly green, the importance of corporate governance is growing. The government has been increasing its focus on ESG, and the penalties for ESG violations are getting steeper.
Question no-2
Strategic recommendations
Good corporate governance requires transparency. Shared information builds trust and solidifies a business's reputation. Organizations must report both good and bad news. Refusing to share information could result in negative publicity. Transparency breeds integrity and trust. Companies should have a plan for sharing information and develop its policy accordingly. Following changes should be implemented in order to combat the corporate risks in the Citic Pacific, these are;
- The company's remuneration policy should be revised. It should not reward management based on performance, because this is a common practice that can be manipulated and undermine the firm's long-term objectives.
- While Citic Pacific's premium prices are sticky, the company must closely monitor geo-political factors, including Brexit, Russian sanctions, Venezuelan inflation, and lower oil prices.
- The company must also be cautious in response to rising protectionism.
- It must consider a diverse set of risks and pursue innovative strategies to mitigate them.
- Furthermore, it needs to be aware of the rapidly changing bureaucracy and government regulations.
- While Citic Pacific has strong brand recognition and brand equity, it may lack the capabilities and skills needed to develop a sustainable competitive advantage. This can hinder the management's ability to invest in R&D and diversify its product offerings.
Question no-3
Effective corporate governance requires long term process management. The company still needs to look after certain factors in order to proceed long term effectiveness. There are certain risks associated with the company which needs constant changes and long term management. The organization requires a strong management system. This system is managed by a board of directors. Its purpose is to facilitate effective management and ensure long-term company success. Yet, achieving good corporate governance is not always easy. Board dynamics often interfere with board effectiveness. Fortunately, there are ways to improve board dynamics and ensure an efficient corporate governance structure of the organization.
Since Sustainable development has entered our lives and our business. Incorporating the 3 dimensions of sustainable development into corporate policies is becoming increasingly popular and this will help the citic to manage the effectiveness of long term corporate governance. Moreover, the company needs to invest in R&D and diversify its product offerings in order to maintain competitive advantage in the market....
This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.
Related Case Solutions & Analyses:
The Management of Berkshire Hathaway
Citibanks e-Business Strategy for Global Corporate Banking (2008)
Apple Inc. 2008
Hong Kong Disneyland
Wumart Stores: Chinas Response to Wal-Mart
Pharmacy Service Improvement at CVS (A)
Genentech–Capacity Planning
Toyota: Service Chain Management
Marvel Enterprises Inc.
Shouldice Hospital Ltd. (Abridged)
