Business Law for Family Leadership - MyAssignmenthelp.com

Question: Discuss about theBusiness Law for Family Leadership. Answer: The fundamental for success with respect to any business organization is corporate governance. Corporate governance can be taken as a way of achieving the objectives of an organization. The governance policy of every organization must be formulated in such a way as it benefits both the society and its members. Organization which are owned and run by families can be taken as either a threat or an opportunity with respect to certain factors. Value may be added to a family owned company if the members provide importance to the benefits of the other stakeholder and creditors (Coffee, Sale and Henderson 2015). Certain important theoretical frameworks are used to evaluate corporate governance and two of such theories being the stewardship theory and Resource dependency theory. How the external factors of an organization effect the functions and behavior of an organization are referred to by the resource dependence theory. The theory fundamentally proposes that an environmental connection between the business organization and outside resources must be present. Any critical uncertainty related to the environment must be prevented by the directors of the organization. In relation to the theory the sources which the organization relies on usually arises through the organizations environment. However the environment is subjected to the behavior of other organization therefore one organization usually depends on the other for its needs (Tricker and Tricker 2015). As multidimensional resources such as raw materials and capital are used by an organization it is difficult for the organization to find alternatives for all such resources thus the matter should be dealt by them using the principle of criticality and scarcity. In the provided article it has been shown that how the personal utilization of resources of the organization by family members leads to the failure of the organization. Transparency is one of the key factors which have to be observed by the members of an organization owned by a family as well as other organization in order to maintain efficiency. In the article it was also alleged that Mr. Gutnik had been involved in hiding assets just before a bankruptcy had occurred. This is also one of the problems of the organization owned by family which can lead to fraud (Bassett and Bassett 2014). The primary objective of a company is to make profit irrespective of the fact that who is the owner. As the family members have an increased ethical responsibility towards each other they should work in a way where the operations of the company benefit the family as a whole. It has been seen in the article that Mr. Guntik had only worked towards personal benefits rather than the benefit of his family. With the application of the Stewardship theory in this case which actually provides for the responsibility of the managers towards the shareholders and creditors of the company it can be said that Mr. Gutnik was guilty as he took care of only personal interest. The creditors of the company owned by a family may not trust the company as it is a probable that they would work in personal interest. Thus it has to be ensured by the company owned by the family that they take into account the discussed theories with respect to its management (Ward 2016) Both independency and member representation in Australia are taken as necessary features with respect to pension fund boards. The regulated superannuation funds regulation is the sole responsibility of the directors of an organization. It is the duty of the directors to observe proper care, skill and diligence towards their duties to the organization. The various decisions which directors and superannuation trustees has to make must be subjected to discretions pertaining to management of risks, insured benefits and investment of fund assets (Hiller 2013). The funds of superannuation works as a trust having trustees responsible for the operations relating to their funds along with executing and developing investment strategies for the funds. The trustees are subjected to legal obligations of considering proper investment of superannuation monies and making due consideration related to diversification and liquidity. Limited number or provisions which have been provided with respect to the superannuation industry through the Supervision Act 1993 can be said to be subjected to any asset or investment exposure flaws requirements. However rare minor limitations exist with respect to borrowing and use derivates and investments in the shares and property of employer sponsors funds. Thus wide varieties of assets are chosen to invent superannuation funds and are subjected to features like mixed risks of duration and return. In the chosen article it has been seen that Bill Watson becomes the first super chief executive who took the initiative no t to invest in companies which operates in the grey market with respect to the labor practices. Through this act he ensured that the company acts in the best interest of the employees through the minimization of any risk which could be arise out of the situation (Cummings 2016). It is provided by the Superannuation Industry (Supervision) Act 1993 that all rules and regulations given through the act must be followed by all superannuation funds. The directors of the company must be subjected to civil and criminal penalties by the parliament in case they fail to responsibly perform their duties in order to benefit the members. The directors should also be subjected to civil and criminal penalties in case it is found that they have misused their position in relation to superannuation fund for personal gain and detriment to the employees or the shareholders of the company (Nemtchinov, Pritamani and Williams 2016). It is thus the duty of all the directors of the company to prioritize the interest of the organization over self and personal interest. When personal and organizational interest creates a conflict the directors must choose the interest of the organization. For the purpose of ensuring appropriate arrangements with respect to business operations all the interest which directors have has to be disclosed by him to the board of directors. Only when the directors acknowledge the interest he has an interest is said to be disclosed. Thus the corporation act through its provisions ensures proper functioning of the superannuation funds. References: Bassett, K.I. and Bassett, D.M., 2014.Behavioral organization systems. U.S. Patent Application 14/473,625. Coffee Jr, J.C., Sale, H. and Henderson, M.T., 2015. Securities regulation: Cases and materials Corporation Act 2001 Cummings, J.R., 2016. Effect of fund size on the performance of Australian superannuation funds.Browser Download This Paper. Hiller, J.S., 2013. The benefit corporation and corporate social responsibility.Journal of Business Ethics,118(2), pp.287-301. Nemtchinov, V., Pritamani, M. and Williams, R., 2016. Factor Investing: A New Paradigm For Superannuation Funds And Investment Managers. Tricker, R.B. and Tricker, R.I., 2015.Corporate governance: Principles, policies, and practices. Oxford University Press, USA. Ward, J., 2016.Keeping the family business healthy: How to plan for continuing growth, profitability, and family leadership. Springer.