Corporate Governance

The case overview here relates to Raamit Pell's departure, the founding CEO of Xcelent

Services, an educational service provided, to his parental organization at Kozerton after

completing his five-year term. The reason for Raamit to move to Kozerton was to become the

CEO of Xcelent Services. Some of Raamit's senior executives at Xcelent Services were not

happy that he was coming back. They thought that his departure might slow down the ongoing

major expansion plans and, on the other hand, aggravate a mutiny under covert Board patronage

involving a powerful clique of certain senior executives. Finally, the parental agency agreed to

let him go. On the day of Raamit's farewell, many executives appeared sad. When Raamit

observed their mood, he wondered whether the decision he had made about returning to

Kozerton was indeed the right one.

Corporate governance is the system by which companies are managed and controlled.

The board of directors is responsible for the management of the company. The shareholder's role

in governance is to appoint directors and auditors and provide appropriate governance. The

board's responsibilities include setting its strategic goals, providing guidance on its

implementation, overseeing business management, and reporting management to shareholders.

So, corporate governance is what the company's board of directors does and how it sets values. A

full-time manager must distinguish it from managing the company's day-to-day operations.

According to Rameshan (2018), Raamit's first option was to continue at Xcelent. He

weighed its pros and cons. On the positive side, he knew that the senior executives supporting

him at Xcelent, who constituted a large majority, would be happy to see him continue there.

Further, the ongoing major project work could progress without disruption with his continuing in

the saddle. A new person joining after him might take time to understand the complex project
and stabilize it. Third, there would be continuity in business operations. This was important

because of the rapid pace of Xcelent's past and ongoing expansion. Besides, Raamit's

continuation might also help to foil the evil designs of the plotting senior executives as he

grasped the nuances of the situation better and could firmly deal with the developments. Finally,

Raamit's continuation with Holding Agency backing and against the preference of the Board

Chairman might enable him to reverse the recent Board interferences in the business operations

of the company and contain the Chairman's undesirable actions to some extent.

Kostyuk (2018), states that the board of directors has to be careful when involving

themselves in activities that pose a particular risk. A risk management process that would

promote the cost-effective achievement of the business should be considered. This is because

reliable information about risk management activity involved in the business will be provided

through assurance. Raamit knew that a new organization carried its own risk as he had to re-

establish his credentials at a new place. A new place might have its own demanding performance

goals. He might also get disconnected from his past achievements and contributions because a

new organization would evaluate him based on his fresh contribution there.

In contrast, his past organizations would soon forget a former executive, howsoever

influential he was there earlier. In addition, many of his well-wishers in his current organization

and at Kozerton might be disappointed about his decision to move to an entirely new employer.

Besides, his family might not be happy about not returning to Kozerton as they preferred

Kozerton as a place to live. Above all, Raamit might not enjoy a new place as much as he might

at Kozerton as he would be a stranger at a new place and would have to start.

According to Visconti (2019), we learn that the importance of getting a strategic

stakeholder engagement plan, but let's not chuck the worth of building stakeholder relationships
and how they'll contribute to your organization's success. Negative stakeholder relationships may

result in costly project delays and cancellations and even negatively impact your organization's

reputation that specializes in building positive stakeholder relationships helps stakeholders

understand your projects better while ensuring they feel involved within the process. This

concentrate on relationships ends up in a higher reputation, lower project risks, and helps the

success of your projects and your organization.

Relating to Rameshan (2018), the five Board members realized that Raamit wasn't a

pushover and would not be tamed by threats or brute force. Hence, they began a game of

frustrating him by creating or fomenting issues among his subordinates and other direct

stakeholders of Xcelent. Raamit used his skills to find their tricks and act quickly to stop any

internal backlash against him. He could contain many such potential issues within the first four

years. So, for four years, a cat and mouse game was current at the highest of Xcelent's

governance hierarchy. They repeatedly filed statements to the board and other controlling

stakeholders, loaded with bogus difficulties and exaggerated claims against the CEO. Some of

the prominent members of the clique might have been terminated through disciplinary

proceedings if the organization followed corporate governance norms without Board politics and

intrigues. However, the board's cold war with the CEO gave them carte blanche; even the CEO

couldn't touch them. Raamit, on the other hand, was not willing to give the board or the clique a

free victory by retiring.

Companies will incur financial, legal, and reputational harm if they lack good

governance. Poor governance poses the most significant risk to a corporation from a risk

perspective. To improve on this, the company's nominated Committee should spend enough time

identifying board members with the necessary talents and industry experience to help the board,
like in the case study of Raamit. That isn't to say that only one type of board member would be

eligible. There should be a balance of board members familiar with the organization, those who

have valuable experience, and those who bring a fresh viewpoint, what's vital for a board to

understand what talents it already has and what skills it needs. Because board interactions and

relationships are critical to overall board effectiveness, a board candidate's interpersonal abilities

should also be assessed (Visconti, R. M, 2019).

In addition to solving management and operation problems in a company, Every board

should put in place a framework for risk supervision and management that works. Risk isn't just

about compliance issues. It's a comprehensive word encompassing all of its hazards and other

risks that aren't covered by law or policy. Effective risk management leads to more accurate cost-

benefit or risk-reward decisions and better decision-making.

There must be regulations to govern organizational behavior, as a board of directors is

accountable for all acts and decisions. Policy making by the board on delegation is critical for

ensuring that there is a clear distinction between the board and management's responsibilities.

This category also includes procedures and processes. Dissatisfaction among directors may be

caused by a lack of information availability, poor communication, and misinformed decision-

making due to bad internal management. This may be a significant difference between an

average or mediocre group of people and a high-performing group of people, depending on how

well they are organized and run (Rameshan, P. 2018).

Kostyuk, A., & Barros, V. (2018). Corporate governance and company performance: Exploring

the challenging issues. Corporate Governance and Organizational Behavior

Review, 2(2), 25-31.

Rameshan, P. (2018). Board stoops to conquer the CEO: end of a power struggle. Emerald

Emerging Markets Case Studies.

Visconti, R. M. (2019). Combining network theory with corporate governance: Converging

models for connected stakeholders. Corporate Ownership & Control, 17(1).