Unit 6: Discussion 1 Peer Response

Response Comments - After posting your initial response to the question, begin making comments to your peers. A minimum of two comments made on two different days must be posted in the discussion for a passing grade.  The comments must be early enough before the end of the week to allow for replies. 

John Cone (Student 1)

For this weeks discussion posting I found a company listed on the NYSE, Wells Fargo, and read up on their corporate governance strategy.  The Wells Fargo corporate governance guidelines gives the Board decision-making ability on significant company policies, monitoring the performance of senior leadership, selection of the CEO, and performing risk management, among other things (Wells Fargo, 2022).  By carrying out these responsibilities, the Board of Directors for Wells Fargo influences company direction to pick leaders and create policy which grows the company, while still accommodating the needs to employees and other stakeholders.  The company enacts policies of corporate responsibility to address these needs, with decision cases falling under diversity and inclusion, environmental sustainability, community giving, economic empowerment, following of regulations, and risk management.  Economic empowerment directed at consumers helps with financial management with programs like Hands on Banking, which teaches adults the basics of responsible money management, and CollegeSTEPS, which focuses on giving college students tools to manage their finances throughout college (Wells Fargo, 2022).  Wells Fargo also includes community giving and volunteering. The company has over 100,000 employees actively participating in internal volunteer programs giving community support, building homes with the Wells Fargo Builds Program and accelerating entrepreneurism in developing countries via the Global Fellows volunteer program (Wells Fargo, 2022). Our course text discusses how stakeholders have influence, with communities affecting the quality of life for employees and employees then affecting the productivity and competitive advantage of the company (Dyer, Godfrey, Jensen, & Bryce, 2019).  I believe that Wells Fargo has a position in the market which demonstrates their balancing of stakeholder interest with shareholders.  The company is rated as the 7th largest public company in America, ranked 29th in the world for profit, 18th for assets, and 61 for market value.  Additionally, the company is in the top 200 companies to work for for new graduates, and ranked #97 for America's best banks (Forbes, 2022).

-John Cone

References Dyer, J., Godfrey, P., Jensen, R., & Bryce, D. (2019). What is Business Strategy. Retrieved from Strategic Management: Concepts and Cases: https://mbsdirect.vitalsource.com/books/9781119563143 Forbes. (2022). Wells Fargo (WFC). Retrieved from Forbes: https://www.forbes.com/companies/wells-fargo/?sh=7b9d921324f5 Wells Fargo. (2022). Community Giving. Retrieved from Wells Fargo: https://www.wellsfargo.com/about/corporate-responsibility/community-giving/ Wells Fargo. (2022). Economic Empowerment. Retrieved from About Us – Corporate Responsibility: https://www.wellsfargo.com/about/corporate-responsibility/economic-empowerment/

Wells Fargo. (2022). Wells Fargo & Company Corporate Governance Guidelines. Retrieved from Wells Fargo: https://www08.wellsfargomedia.com/assets/pdf/about/corporate/governance-guidelines.pdf

Iprita Bhattarai (Student 2)

Corporate Governance tells how a board of directors would like to govern and oversee their company. “It is a system of rules, policies, and practices that dictate how a company’s board of directors manage and oversee the operation of a company” (Trinidad, 2022). It includes being accountable, transparent, and secure. A company I have selected to talk about their corporate governance is Tesla, Inc.

Tesla, Inc. is one of America’s automotive companies that is based on clean energy. Founded on July 1, 2003, by Martin Eberhard and Marc Tarpenning as Tesla Motors, they sell various models of electric vehicles. With over 110,000 employees and a revenue of around $5.8 billion as of 2021, Elon Musk has been serving as the CEO of the company since 2008.

Tesla’s corporate governance “sets high standards for their employees, officers, and directors” (Tesla, N.D.). It further talks about the Board of Directors taking responsibilities to distribute duties and follow all rules that are subject to any changes for the sole profit of shareholders of the company. Based on their corporate governance, it does not look like the organization’s goal is very much aligned with the stakeholder’s goal. Good governance is one where employees have the freedom to speak and voice their opinions, however, there are articles about mixed experiences with Tesla employees.

There are cases of low hourly pay to the production assistants and paying salary that is not really viable with the cost of living, these were some of the major concerns of a number of employees. In addition, “several employees complained things were disorganized, and they were working long hours, making the work-life balance extremely stressful” (Johnson, 2020).  At the same time, other employees mentioned, Tesla had exceptional teams where leaders treated them well and working was fun and less stressful.

Since the interest of shareholders and stakeholders are two separate things, it is important for not just Tesla company, but any company to find a good balance between the two. “Shareholders are interested in company’s market valuation, and stakeholders are interested in company’s performance” (Nola, 2021). Because a shareholder’s interest in a company is not long-lived, meaning if they sell their share, then they are no longer a shareholder, and a stakeholder on the other hand will always have more long-term interest in the company, it is important to find a good balance between the two. 

References:

Trinidad, C. (2022, July 8). Corporate governance. Corporate Finance Institute. Retrieved July 13, 2022, from https://corporatefinanceinstitute.com/resources/knowledge/other/corporate-governance/

Tesla. (n.d.). Corporate governance: Tesla investor relations. Tesla. Retrieved July 13, 2022, from https://ir.tesla.com/corporate

Nolan, P. (2021, December 16). Stakeholders vs. shareholders: What's the difference? The Balance. Retrieved July 13, 2022, from https://www.thebalance.com/stakeholders-vs-shareholders-what-s-the-difference-5190191

Johnson, W. (2020, August 22). What's it really like to work at Tesla? MotorBiscuit. Retrieved July 13, 2022, from https://www.motorbiscuit.com/whats-it-really-like-to-work-at-tesla/

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