This paper reveals various factors of governance at QBE. QBE, being one of the World’s top insurance companies presenting itself strongly in the insurance markets. They make very good use of their dynamic nature to make the entire management effective and efficient. Governance plays a very crucial and important role in determining the success of the organization functions. Governance is the structures and processes of how power is exercised in any organization with board of directors and even stakeholders. These are the major decision makers for any organization and QBE is not an exception.
The story of QBE started way back in 1886 and clearly has transitioned its governance styles form one form to another until now where it’s managed by an executive board of ten (10) member appointed by shareholders and also other investors who are the shareholders. The size of the board is not constant as it’s subject to regulatory requirements from the constitution. In order to get a clear picture on the strategies that work with any organization, we need to comprehend the potential practices and structures that we put in place (Christopher, 2016). Moreover, to understand the environmental forces and other factors that exposes the company to losses that can possibly confront the entire market if proper governance is not practiced.
There are different types of governance models and they include;
To improve effectiveness the board of directors is expected to come up with the governance analysis tool which helps in the assessment of collective self reflection in its governance practices of QBE. Based on the governance analysis tools and the corporate governance framework the company is able to build a stronger and stabled environment for QBE. The sectors of the governance analysis tool is categorized into four major area; the stakeholders, individual directors, the organization and finally the board. The stakeholders they majorly focus on the approach taken by the board with regard to accountability, communication and engagements with the key stakeholders. (Turner, 2017) The individual directors focuses on director attributes including an understanding of duties ,key competences, qualifications in terms of leadership and even conduct. The organization relates to how the boards governance in terms of regulatory compliance, the executive, and managerial personnel, its strategy vision and mission, performance and risk management. Finally the board does cover the quality and operation of the board as a combined effort of directors. They majorly use the committees, meetings, group competencies and compliance systems with relation to legal standards.
The CEO has a fundamental role of managing the day to day activities of the company and is entirely responsible to the board particularly with regard to performance and development strategy. The major responsibilities include;
Corporate Governance is a system that has rules and regulations, processes and practices that a company is controlled with and is expected to follow diligently(Dine, 2004).It involves an over view of all the players in a company and they include shareholders, management, suppliers and employees. QBE is governed by principles of corporate governance. The company understands the importance of a vibrant and robust corporate governance. Furthermore, it recognizes all its clientele, shareholders, employees and the community at large. These principles have been proven to be a point of reference and also an effective way for implementation of the company’s strategies. These principles ensure that there is an efficient and effective corporate governance framework and transparency in fair markets and allocation of resources. It also provides the right and equitable treatment of shareholders and major ownership functions. (Pierreault, W., McCathy, & E., 2015). These rights include access to information in decision making, voting rights and even decisions on remuneration of the executives. It also provides the roles of stakeholders in corporate governance and responsibilities of the board. Some of the roles of board include selection and remunerations of management, overseeing major acquisitions and mergers, ensuring integrity with regard to financial reporting and accounting, risk management, tax planning and internal audit. There is need for stable economic incentives with regard to investment chains and this in particular, entices investors. (Pierreault, W., McCathy, & E., 2015)This is also among the principles of their governance. It also emphasizes on the need to disclose and reduce conflicts of interest that may affect integrity of proxy advisors, brokers, agencies who give analysis relevant to investors. Finally transparency and disclosure is also primary to their governance. (Turner, 2017) The board should be in a position to state clearly in their management reports the financial results, company objectives, remunerations, risk factor and also non-financial information of the organization.
For nearly most successful governance models, the governing body will be depended on in creating a vision and mission for long term and short team goal, executing the goals, fortifying resources and allocation, establishing standards for accomplishments and monitoring them, being accountable and transparent to key shareholders, planning, decision making and overall oversight of the QBE’S operations. All these functions must be done promptly and diligently.
We all understand that the management can’t be all flawless and incase of poor governance the company is bound to loose so much not only on reputation but also the employees trust in their leadership and thus a major loss.
The major challenges facing good governance include; implications of a multi speed economies. When the directors are putting all their focus on this, it shows their high concern regarding it all over through to the other competitors. Another challenge is political interferences in the business activities, this directly affect the company as any interference destabilizes the company day to day issues. Capital management issues which include things like hardship in raising capital in a risky market could be a major challenge to governance (Thicker, 2015). The board main responsibility is to increase the shareholders profit and if they have a problem in running the day to day activities it becomes an issue to achieve maximum profit. This drives companies to try and look for other ways of funding their activities. Another issue facing the board is understanding the implications of the foreign laws. An example is the bribery law, corporate offences and foreign corrupt offences. New laws are constantly being amended and they need to be up to date or else very serious repercussion will be felt, this could be imprisonment, fines, and compensation.
Poor governance not only affects the company, the government in terms of taxes but also the individuals who were taking on the responsibility of leadership. This leads to imprisonment of the individuals especially if it was corruption, bribes or even money laundering. The company loses its credibility to the market thereby affecting the profits and thus eventually employees lose their jobs and probably their source of livelihood. (Laudon, 2012)Once the profits reduces the government also don’t get as much taxes as previously when the company was performing at its peak. It is therefore important to keep good governance as we have discussed in this paper.
Conclusion
Organizations, especially the likes of QBE ones that are involved in the insurance business have partners, investors and customers that need to be pleased. Not only them, the company’s competitors and the other entities involved in the day to day activities of the microenvironment and the forces related to the same impact the opportunities. According to the information in this paper above, we are in a position to point out that the team work operations and other forces impact the organization’s structure and management hence, monitoring the same becomes crucial to the business success. Also, it is important to respond and act to the crisis whatsoever it may be and when it has happened. Today, QBE is still focusing on meeting the needs of their customers and looking forward to the future with the same excitement, determination and enthusiasm that founders Burns and Philp did in 1886.
Governance has evolved from focusing to stewardship, fund raisings and civic duties to something much big and complex. Right now management focuses on customer satisfaction, financial management and overall management. But the future still holds a lot of challenges and strategy performance will be their next big focus. The boards of directors need to put the correct people with the correct expertise at the head of all these critical issues. Once the board of directors and other executive leaders know what they should focus on, a proper structure and stability within QBE will be felt all the way from consumers and even employees. QBE must be able to realize the urgency and importance of good corporate governance, understand the basic structures and processes in governance and finally since it’s in several countries worldwide they need to build a strategic, value added board.
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