Corporate governance is defined as “wide framework of systems, rules, interfaces and principles that form the basis of fiduciary corporate culture and values” (Laurent, 2006) Such chains and systems in a company or conglomerate as large and diverse as the Virgin Group have no alternative but to be extremely complicated. In order to manage such a wide variety of companies and to ensure accountability within the ranks, a detailed and structured model of governance must be applied.
A very good model involves the formulation of committees that review the remunerations given to various high-level members of the Virgin team, such as directors and managers. Other committees specifically designated for controlling the relations between the company managers and shareholders are also necessary constructs in the supply of data throughout the Group (2006). This will facilitate the shareholders’ access to information concerning the company as well as their right to make decisions about the company’s operations.
Independent audits also facilitate this kind of communication, and it undergirds shareholders’ trust in the company to do business without deception. The internal running of the Virgin Group and its data supply chain would also be heavily assisted by such methods as regular reports made on the financial status of the company (Laurent, 2006). Regular review of the management of cash flow and immediate inquiry into any discrepancies that arise in these matters is also crucial to governance.
Assurances given to shareholders, employees, and to the public at large regarding the risks involved in the company is an area that should be handled first at the level each member-company of the group and then at the Group level. Also, in such an organization that is made up of several smaller entities, the clear definition of the roles of each company manager and/or business owner (as well as the limits of their authority) is also a necessity within the area of the company’s governance. Finally, the board of directors of Virgin Group should take decisions regarding the overall strategy of the Group.
The chairman Richard Branson should (and apparently does) create wide strategic visions that are appropriated by the heads of the different companies that make up the Group (Virgin, 2007). Furthermore, the board of directors should represent a wide range of abilities and experience in the areas of finance, enterprise and operations. Thus, the balance created between the ratio of executive to non-executive directors will ensure that the interests of the Virgin Group be maintained in an atmosphere of fairness (Stagecoach, 2002).
Laurent, W. (2006).“Corporate governance: the data supply chain. ” DM Review. February. Retrieved on January 21, 2007 from http://www. dmreview. com/article_sub. cfm? articleId=1046700 Stagecoach Group. (2002). “Corporate governance. ” StagecoachGroup. com Perth, Scotland. Retrieved on January 21, 2007 from http://www. stagecoachgroup. com/scg/ir/finanalysis/reports/2002/annual02/indexed02/cor porategovernance. pdf Virgin. (2007). “Ask Richard. ” Virgin. com. Retrieved on January 21, 2007 from http://www. virgin. com/aboutvirgin/allaboutvirgin/richardreplies/default. asp