McBride financial is an organization that needs to focus and adhere to compliance issues within the organization. Two effective ways of ensuring this is for McBride Financial to implement charters and bylaws. Doing so will transfer authority of the organization from the CEO to the independent Board of Directors. “Bylaws established by the board of director’s authority include the specific rules that govern the corporation and its business conduct” (Chew, D. and Gillian, 2005). “Charters assist in the creation of committees. “Charters give the purpose to the committee, qualifications, member’s designation of a chairman responsibilities, duties, and meetings” (University of Phoenix, 2010).
The second focus would be to create a Code of Ethics program for employees to abide by. “The code of ethics will also ...view middle of the document...
5 million for the 46 businesses they studied.” (ShredNation, 2012) As the quote states, adhering to compliance including implementing external and internal auditors is expensive. Although the costs may be high, non-compliance can be just as costly in a negative way to the organization.
Non-compliance can cause loss of positive reputation, loss of investors and shareholders, loss of customers, decreases in stock prices, lack of revenue, state and federal regulation fines, corporate scandals, financial bailouts, and last failure and closure of the organization. These risks are all costly to an organization and can cause ultimate failure. Adhering to compliance is crucial to prevent companies from failing and taking huge financial loses.
McBride must implement a system of audit compliance committees that will help mitigate non-compliance. Audit compliance committees will review financial documents, including receipts, documents, stocks, trades, shares, investment numbers and any other financial documentation. Non-compliance includes behavior and unethical actions performed by senior management that will be audited and monitored by the compliance committee. The committee will consist of internal and external auditors who will each have a part in ensuring McBride continues to perform and service the needs of customers and investors fairly and ethically.
McGraw-Hill companies is an organization that is committed to the highest standards of corporate governance.
Chew, D. and Gillian, S. (2005). Corporate Governance at the Crossroads: A Book of Readings New York: McGraw-Hill Companies.
University of Phoenix. (2010). Charter of the Nominating and Governance Committee of the Board. Retrieved from University of Phoenix, MMPBL570 - Corporate Governance website.
Shred Nations. (2012). Retrieved from http://www.shrednations.com/news/2011/02/03/how-much-does-compliance-cost/