Corporate Responsibility and Governance Assignment - 1

Corporate Responsibility and Governance - Assignment Example There are multiple constituents included within stakeholder theory, apart from staying inclined towards just shareholders. Multiple stakeholders existing within business environment are employees, government, suppliers, customers, financial institutions, shareholders, competitors, trade unions, public interest groups, legal institutions, etc (La Porta, Lopez-de-Silanes, Shleifer and Vishny, 2000). Corporate governance structure of Nestle indicates giving equal importance to all stakeholders. The board of directors are responsible for handling all stakeholders and undertaking combined business strategy. Compensation principles of Nestle Group are taken into consideration by board of directors. Total compensation of executives and board members are thoroughly reviewed by shareholders. Stakeholder theory clearly demonstrates that all stakeholders would be given equal importance for obtaining stabilized firm position. Nestle has its business operations spread across the globe. The compan y handles its extended business base by giving importance to all stakeholders. Board Members are responsible for compensation plans but it is also thoroughly reviewed by other team members. Long term business purpose of the firm is retained by considering team interests and then implementing them into realistic plans. Good governance codes can be stated as a set of rules followed by top management in order to accomplish corporate objectives. These codes comprise of best mechanism which are related to other stakeholders as well as board of directors. Effective governance principles are established through governance codes. Governance codes do not possess any such legal binding but are necessary to influence board of directors so that they are able to control behaviour of top management. An appropriate regulatory framework is maintained by Nestle so as to guide overall operations of board of directors. These codes for