For an individual to work efficiently and effectively in a capacity as a director or an officer, he or she must have a comprehensive understanding of the duties, roles, and responsibilities. The fiduciary role of the directors and officers is to guide the organization in the path of sustainability by promoting the adoption of ethical, legal, and sound policies. Furthermore, the directors and officers must ensure that the business attains adequate resources that are required for smooth operations.
The first legal responsibilities of the directors and officers are the duty of care. The officers and directors must participate in the oversight and governance of the organization’s corporate activities. The duty of care is accomplished through the following:
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All officers and directors must attend committee and boardroom meeting whenever any has been convened by the chairman.
The directors must review and analyze the financial reports and documents.
The officers must be proactive in identifying and mitigating risks that may impede the growth and progress of the organization.
The directors must ensure that the organization adheres to all the relevant laws and regulations.
The directors and officers must be engaged in the hiring and firing of all employees including the chief executive officer.
The second responsibility of the directors and officers is the duty of loyalty. The policy statement emphasizes that the directors and officers must exemplify strong attachment to the organization. As such, the officers must avoid falling into the trap of conflicts of interest. As it has been witnessed before that most of the directors have been disloyal to the organization due to conflict of interest, a document outlining the standards and expectations will be formulated. The directors and officers will commit to the organization by signing and resigning the conflict of interest policy yearly. The policy will include provisions that enhance frameworks for resolving conflicts, procedures of disclosing a conflict of interest, identification of conflict of interest situations, and restrictions on a specific individual to engage in activities that manifest conflict of interest such as voting and deliberation.
The third responsibility of directors and officers is the duty of obedience. In this case, the directors and officers are expected to guide the organization into the path of legal and ethical compliance. The organization has its goals and objectives which are facilitated through a broad continuum of internal policies. The directors and officers must show interest in ensuring that the organization remains on the track in pursuit of the goals and mission.
The business judgment rule in the organization stipulates that the directors and officers make prudent decisions that serve the best interest of the company after extensive research, in-depth analysis, and evaluation. The directors and officers work within the restraints of legal provision when making decisions regarding a particular issue in good faith.
Benefits of Compliance
The first benefit of compliance is that it enables the company to avoid future costs and legal risks. The organization risk facing legal impediments if it has been determined, with sufficient evidence that it has breached regulations regarding business standards, practices, and procedures. The cost of settling the lawsuits are normally high which may affect the financial reserve. Again, an organization that has been indicted in illegal and unethical practices tarnishes its public image and reputation. The competitiveness of a corporate is significantly affected by public perception ( DesJardins, 2014 ). Therefore, the organization must strive to be on the better sides of perception by strictly abiding by all the rules and regulation.
Through compliance, brand loyalty is strengthened. Organizations that are compliant have strong brand loyalty. Due to the intense competition in the markets, most of the products have supplementary options. The contemporary consumers are dynamic and demanding in the sense that they want to be identified with organizations that hold high moral and ethical standards.
The company will remain sustainable in the future by complying with the regulations that have been set forth. Sustainability is a goal for Fitzgerald Foods that can only be achieved through the adoption of robust policies, risk mitigation measures, and adherence to business laws and ethics.
Consequences of Noncompliance
Any director or officer who fails to comply with the rules and regulations jeopardizes the business prospects of Fitzgerald Foods. As such, the directors and officers involved are held accountable for erecting barriers that decelerate the growth and success of the company. The productivity and profitability of the organization are affected when its operation halts due to noncompliance cases.
Noncompliance in the organization leads to the emergence of conflicts and disputes ( DesJardins, 2014 ). The blame game that often characterizes organizations facing noncompliance charges affects the relationship among the employees. As a result, job performance and satisfaction are greatly impacted.
Noncompliance leads to termination of employment contract. Officers who have been implicated for failing to follow the rules have been fired from their position. An example of such case is the sexual harassment allegation against Harvey Weinstein ( Harris & Ransom, 2018 ). The award-winning producer apologized for the sexual misconduct. However, he had to part ways with Weinstein Co.
The first business risk management procedure that Fitzgerald Foods should take is to formulate a recovery plan. Determining whether officers and directors will comply with the regulations remains a matter of conjecture. Therefore the recovery plan is critical in the event of uncertainty. The second procedure is to establish a business continuity plan that addresses prevailing issues and projected issues in the future.
References
DesJardins, J. R. (2014). An introduction to business ethics . McGraw-Hill/Irwin.
Harris, E. A., & Ransom, J. (2018, December 6). Harvey Weinstein makes an email plea: 'I've had one hell of a year? Retrieved December 12, 2018, from https://www.nytimes.com/2018/12/05/arts/harvey-weinstein-email.html
