Corporate Governance


Transparency in Corporate Governance
Tanya Garcia
University of Phoenix

Corporate Transparency

      Recent corporate scandals brought about a number of regulatory changes. Transparency in corporate governance is a result of these scandals, requiring increased disclosure in financial reporting (Hernalin & Weisback, 2007).   The situation with corporations such as Enron and Worldcom reveals the need for full disclosure reporting in publicly traded companies.   Sarbanes-Oxley (SOX) is a regulation that mandates increased disclosures and offers “penalties to executives for misreporting” (Hernalin & Weisback, 2007, p. 2). This increases awareness of the need to improve corporate governance in the public’s mind.   This paper addresses McBride Financial Services and the opportunities the organization has to increase transparency in corporate governance, therefore improving the perception of investors, employees, and the public.

Concept of Transparency #1

In Hugh McBride’s memo to Paul, he describes how closely Beltway will be watching the organization, especially the financial reporting aspect.   At this point, McBride Financial Services still owes the SEC quarterly and annual reports. Rather than asking the brokers for input or support, Hugh requests Paul to handle the accounting himself (Supplement: McBride Correspondence, 2010, p. 2). This does not provide for transparency, but rather keeps financial data in a silo.   In addition, Hugh’s lack of awareness of SOX requirements puts the organization at risk, not to mention the perception he is creating for his employees, investors, and the public.
According to Hernalin and Weisback (2007), they make an assumption about the chief executive officer’s (CEO) ability on his current performance or past performance. Beltway has no guarantee of how Hugh McBride will perform as CEO; however, the organization’s past performance is an indicator of how the company...