Academic Master

Business and Finance

Corporate Governance Of Cummins Inc Company

Explain the governance section of the organization.

The corporate governance section impacts the economic measures and outcomes of any company. Companies that follow poor standards of corporate governance face economic failures (Detomasi, 2006). Cummins Inc. is an American organization that is working to provide and design fuel systems, filtration, engines, and power-generated systems. The company is following the measures of social responsibility, and its mission is to serve the communities. The company engages its stakeholders in every project and works on sustainability measures for future generations. The company is following the pattern of corporate governance and its model to gain success in its mission. The company’s main aim of corporate governance is to follow appropriate measures and values to improve the value for the stakeholders, the employees of the company, and other linked stakeholders. The pattern of Cummins Inc. Company’s corporate governance is that it includes its board of directors to handle the affairs of the company and protect the interests of all the company stakeholders. The panel of the board of directors always follows independent judgment measures while dealing with strategic and operational issues. The senior management of the company always applied the measures of governance to stick with the mission of the company.

Analyze the connection between business and society.

The corporate governance pattern is based on a particular framework that maintains a proper check and balance system of any company as the Chief Executive Officer is the one who is able to manage the enterprise, but the board of directors are the ones who are considered the most appropriate part of the corporate governance. In the United States of America, the pattern of corporate governance is linked with capitalism (Franklin, 2009). Society and business have a very critical relationship in which the expectations of societies change with time and are based on advanced market trends in the economic system. Societal people expect the best business strategies and consider that companies should analyze the factors that social issues are also important in the structure of businesses. The businesses are based on the social, legal, and economic obligations that are needed to fulfil the requirements of the involved stakeholders.

Detail how this connection affects the corporate governance of the company.

The social, legal, and economic obligations are required to meet the stakeholders’ demands. Societies mostly want global trends implemented in business patterns, and corporate governance patterns are adopted to ensure the stability of the organization in the long term. Cummins Inc. focuses on engaging its stakeholders in every project and adopting the most appropriate sustainability measures to ensure the success of the company’s mission. The main target of the company is to adopt measures that will develop the value of the company for the stakeholders who are part of the society.

Examine the future of corporate governance globally. How does your chosen firm compare with global trends?

The corporate governance pattern is widely spread around the world due to its successful implications; however, many times, it faced failures as well, such as the example of the Enron Company. In the future of corporate governance, studies predicted that in the future, companies will require a pattern in which the focus will be the long-term value for all the involved stakeholders as compared to the fact that companies only pay attention to the delivery of short-term returns to the shareholders. Changes are required to the system as the companies will have to target long-term strategies so that targeted stakeholders and society will gain benefits (Allaire, 2013).

Cummins Inc. is considerate of its stakeholders, and that is why it promises to protect their interests. The independent judgment measures are followed by the board of directors of the company to deal with the company’s issues.

It includes a board of directors to handle the affairs of the company and protect the interests of all the company stakeholders. The panel of the board of directors always follows independent judgment measures while dealing with strategic and operational issues. The senior management of the company always applied the measures of governance to stick with the mission of the company.

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