The Chosen Organization is Apple Inc.
The Chosen Competitor Organization is Google Inc.
The effectiveness of corporate governance if a business desires to set and ensure that it meets its outlined strategic goals. A structure used for corporate governance always takes into consideration the methods of control, guidelines, and the applied policies that help in driving the organization towards achieving gits objectives while also realizing the needs held by the stakeholders (Three Types of Corporate Governance Mechanisms. 2017). A structure of corporate governance always has various combination of mechanisms: internal and external mechanisms. Apple Inc. leads as one of the most valuable companies not just in the United States but the world as a whole. In helping with cementing its position, the organization uses some of the leading governance mechanisms not just in the technological industry, but also across the global market. Other competitors like Google Inc. have also matched the ability to produce new products, leading in acquisitions, or making newspaper headlines for rumors.
Google (NASDAQ: GOOGL) Apple (NASDAQ: AAPL) are two leading corporations that do not need any form of introduction to be carried on them (Friesner, 2017). The two organizations have it all when it comes launching of new products, however, by comparing the business governance policies two giants in the tech world, then the non-visionary investors can be helped out on the best ways of making a better decision relating to investments.
Taking a closer consideration at the board of directors for both Apple and Google, the board oversees the actions and operations of the CEO, setting up and monitoring the organization strategy, and going to superior lengths to ensure that the interests of the shareholders are preserved.
Summary of the key aspects of the Apple’s governance mechanism
There are several board policies used by Apple. The organization has several bylaws that provide the board containing independent directors not serving elsewhere in a number exceeding four boards of the publicly traded organization (Apple – Annual Report. 2017). Each of the directors is elected on an annual basis, hence ensuring competencies. The many elections provide the shareholders with the opportunity of getting rid of underperforming managers. On their part, the directors have no timeframe of serving. Further, the board of Apple contains about eight members, who are all independent except for the current CEO, Tim Cook. The chairman and the organizational CEO has different roles (Friesner, 2017).
Apple has its issues to deal with the age limit of the members of the board, with the current average age being at 63 (Friesner, 2017). Since the majority of the individuals appealed by the products from Apple are young, it would be more benefiting to the organization had it incorporated a relatively more inexperienced director. Further, since some of the current members of the board had served for a period exceeding a decade, this length of service leads to reduced chances of innovation.
For Google Inc., its bylaws demand that not less than two-thirds of the organizational directors must be independent. Just like the case of Apple, Google also holds annual elections for the boards and no limits of the terms of service. Google further puts it as a must for the CEO to possess USD 14 million about organizational stock and the other directors must own stock valued at USD 750,000. Besides, Google provides its managers with the ability to hire external consultants and outside counsel without waiting for the approval of the management (Friesner, 2017).
The board of directors for Google are majorly composed of the three initial founders Larry Page, Sergey Brin, and Eric Schmidt. Nevertheless, both Apple’s and Google’s board have their set of flows. For instance, there is no diversity on Apple’s board, while the tenure of Google’s directors tends to be excessively long. In conclusion, there is vast room for improvement in issues related to the performance of the organizational strategies of the board.
Apple – Annual Report. (2017). Investor.apple.com. Retrieved 11 February 2017, from http://investor.apple.com/secfiling.cfm?filingid=1193125-14-383437
Friesner, Z. (2017). How Do Apple’s and Google’s Corporate Governance Policies Associate? — The Motley Fool. The Motley Fool. Retrieved 11 February 2017, from https://www.fool.com/features/specials/2014/07/10/how-do-apples-and-googles-corporate-governance-pol.aspx
Three Types of Corporate Governance Mechanisms. (2017). Smallbusiness.chron.com. Retrieved 11 February 2017, from http://smallbusiness.chron.com/three-types-corporate-governance-mechanisms-66711.html