Ford Motor Company Business and Corporate Governance Research Paper

Excerpt from Research Paper :

Ford Motor Company

Business and corporate governance plan for Ford Motor Company

Key components for corporate governance plans


Business Goals

Strategic Management



Current issues for Ford Motor Company in corporate governance plan

Shortage of Parts from OEM Suppliers

Company Structure

Corporate Responsibility Committee

Marketing Committee

Define the current need for a governance plan

Ethical business Approach

Business Objectives

Role of Stake Holders

Structured Decision making Process

Share Holder's Concerns

Accountability and Transparency

Development of corporate governance plan

Corporate Code of Conduct

Audit and Risk Committee

Remuneration Committee

Nomination Committee

Performance evaluation

Risk Management

Shareholder's Communication

Process for implementation and periodic assessment



The corporate governance plans are developed on the basis of business vision, mission, and strategy. The business cannot inherit the corporate governance required by the whole industry. The company specific practices and objectives as well as the degree of willingness for transparency and accuracy in reporting system is also an essential factor for the business. Ford Motor Company had a bureaucratic structure and large company operations. However after the economic meltdown the business decided to restructure itself and envisioned a desire for sustainable growth. These elements of corporate policy have helped the business gain its share value and create a dynamic, open, and transparent charter for corporate governance.

Key components for corporate governance plans:

The corporate governance plans are established to work as a living document and provide essential support for the business operations. The corporate governance plans are also established to address key issues of the business governance. It is also noted that key to business and organizational growth is dependent on the accuracy and strength of defining, developing, and implementing accurate corporate governance plans. These plans are also essential for shareholder's confidence and transparency in reporting (Spitzeck, & Hansen, 2010). The key components of a corporate governance plan's authenticity are defined as ethical, business goals, strategic management, organization, and reporting as elaborated below.


According to Strine Jr. (2010) the ethical base for business is the first requirement for any corporation to establish a long-term perspective. The ethical base for the business is also generated from its values, business processes, and values for the shareholders. The ethical practices in all the related business operations is also an essential element in order to create a brand image of noble and responsible business organization. The business should not only be responsible towards its internal stakeholders but at the same time it is also reasonable for external stakeholders and society at large. The shareholders, board of directors, management, employees, distributors, customers, and society in which it operates should also be treated based on ethical principles.

Business Goals:

Appropriate goals that are defined with the consultation of stakeholders and a proper decision making model is adopted. The business objectives and goals are of key relevance for developing strategies and measurement. One of the major issues in setting business objectives is establishment of goals that are accepted through the due process of decision making. The second most important issue is related to the objectives that can be measureable and tangible in nature. The SMART goals techniques can also assist the business in developing business objectives that are specific, measureable, achievable, realistic, and timely. The business objectives for corporate level as well as business and functional level can also be established using SMART goals practices.

Strategic Management:

Strategic management is also an area of concern that is relevant for consideration for not only the auto mobile sector but overall businesses seeking growth. The strategic management is concerning the strategy to achieve objectives. The goals business and objectives can only be achieved through development of strategies appropriately taking into consideration the shareholder's values. Corporate governance has to address the issues that are considered to derive an effective strategy for achievement of the objectives. The ethical means should also be taken into consideration for organizational improvement and effective corporate governance. The strategies for corporate governance are discussed and approved by the board through consultative decision making process.


The corporate governance based on ethical business practices enables the company to establish a sustainable organizational structure. The organizational structure is a widely highlighted issue for large corporations including Ford Motor Company. The businesses adopting change usually restructure their organizations to develop a change management strategy. The formal structure of organizations affects the business performance and it is also relevant for developing an organizational culture. The lean organizations tend to develop a close contact with the management and employees. Toyota Motor Company is one of the notable examples for addressing their economic issues during war times in Japan. Later the Just in Time manufacturing technique as well as the lean management model of the company became a standard in industry.


The assurance of transparency and accountability is established through efficient reporting structure. The ethical accurate reporting practices help the business establish its credibility for the shareholders and investors. The business is also obliged by legal and regulatory requirements to report its annual progress. The authenticity of reporting practices provides the board of directors and shareholders to undertake correct decisions for the future. The business ensures its transparency through accurate reporting and establishing long-term credibility among its investors. The establishment of long-term credible relationships with investors is one of the top priorities of large corporations. It can be achieved through adopting practices that are based on ethical and transparent reporting. Investor trust is also valued for long-term growth and investment requirements (Acharya, Gottschalg, Hahn, & Kehoe, 2013).

Current issues for Ford Motor Company in corporate governance plan:

The history of Ford Motor Company has a deep routed relevance for business and corporate governance. The business was one of the most iconic entities of old times. Ford Motor Company and Toyota Motor Company were arch rivals of each other with one representing a corporate and bureaucratic style of company structure and the other was an example of lean business organization respectively. Ford managed to restructure its business organization and became a relatively smaller organization as compared with General Motors. The survival of the company was sought through restructuring. Prior to restructuring the business had a brand name for defining the governance model adopted in the company (Ciravegna, 2012). The issues related to the shortage of OEM supplied parts; company structure, corporate responsibility committee, and marketing committee are highlighted as issues in the governance plan of the business.

Shortage of Parts from OEM Suppliers:

The business has faced a shortage of OEM parts supplied to the plants especially in Belgium. The business faced serious issues with the manufacturing and supplies of Cars after Black Swan events in Japan. The business should address issues related to concentration of its suppliers in the same geographic area. It should make all out efforts to establish a basket of suppliers that are either geographically spread in different locations as well as independent from the previous supplier. The alternatives for suppliers with a spread of geographic and market-based presence will enable the business to smoothly fulfill its commitments in the future. The issue should be raised in the board meeting and addressed.

Company Structure:

The company structure of the business should be improved further to include the committees proposed in order to increase the business objectives for sustainable growth. The marketing and corporate social responsibility initiative of the business governance can provide required assistance for growth in terms of long-term perspective. The company can include it in agenda for next board meeting and after the approval of board members it can implement the proposed changes in the company's corporate governance structure.

Corporate Responsibility Committee:

The importance of sustainable growth is one of the key areas of interest for stakeholders. The business performance in coming years is dependent on the initiatives for fulfillment of the corporate social responsibilities. The legal requirements are also confined for motor manufacturers in order to comply with the omissions and fuel consumptions standards throughout developed markets. The developing markets are also following the European and United States government initiatives to implement laws related to improvement in fuel consumption and reduction in carbon emissions. The committee charter can enable the members to develop a long-term corporate social responsibility plan for facilitating the long-term business sustainability.

Marketing Committee:

The marketing committee should also be designated through developing a charter for the committee at the highest levels. The marketing activities to sponsor certain car industry events and taking a leap into the global market can also provide a diversification for business operations in several emerging markets. The marketing committee can also identify the global market through which the business can easily attain its targets. The marketing and sales of European manufactured cars in the region and emerging markets can be an achievable objective. The committee can identify the opportunities in the sector.

Define the current need for a governance plan:

The motor companies are also facing low economic activity due through global meltdown of economy. The growth of business in the motor manufacturing sector is also an issue…

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