INTRODUCTION
Every business wants to improve corporate governance to satisfy its stakeholders. In the international business process, the corporate governance needs the appropriate attention of the management. Controlling the firm through pertinent rules, processes, and practices are a good approach to enable smooth and sustainable growth in the long run. The article indicates some corporate governance issues, faced by Unilever. It is a global firm, and integrating with the international business principles is interesting.
ARTICLE SUMMARY
Unilever went public to announce its proposal. The company wants to move its headquarters to the Netherlands to gain several business benefits and avoid further business obstacles. However, the big issue is the shareholder’s resistance. Asset managers and many other shareholders, including investor condemn the proposal and intentions of the company publicly. The big issue in the company regarding its corporate governance is the gap between shareholders and the top management. They do not agree with one-sided decisions. It is a fact that they are pushing the company due to their heavy investments to make some changes. Unfortunately, the management has not set the pertinent criteria for shareholders raise their concerns, opinions, and thoughts. Apart from the issue of headquarter, the big resistance has emerged in the United Kingdome due to the high pay of executives. Lack of diversity in the board of the company is also a major corporate governance issue. Thus, the mutual understanding is missing, and it increases the resistance (Mooney).
RELATING TO THE PRINCIPLES OF INTERNATIONAL BUSINESS
Localization
The first principle that can be applied to corporate governance is the localization. In an international business like Unilever, the firm must have to localize the business process that can satisfy all key shareholders. For instance, in the United Kingdom, there are many local investors that are willing to invest in this company. However, the contradictions due to lack of localization are in the limelight. If Unilever localizes the business regarding the corporate governance, it can satisfy its local shareholders. Localization is mandatory, which can restrain the company from moving its headquarters to the other country. The shareholders have different concerns, and these can be tackled through localization (Folsom, Gordon and Alstine).
Fairness
Fairness is a prominent international business principle. It is a fact that Unilever does not contain or depict the fairness as far as the business shareholders are concerned. For Instance, the salary of internal executives is increasing. On the other hand, the return of the external shareholders is decreasing. Ethically, the company is not going in the right direction. The internal corporate structure has not been aligned with the external business shareholders including investors. Thus, when improving the corporate governance in international business operations, fairness is an appropriate principle to execute effectively (Mooney).
Solving bigger problem equals to Bigger Reward
In the Unilever case, the management of the company is facing issues in the international business. The dissatisfaction of the shareholders is the biggest issue that can ruin the whole business process. If the firm is intended to solve this bigger problem, it can get the bigger reward. For Instance, this issue can be resolved by improving corporate governance. The main elements to improve on this process are the decision making and collaboration with the shareholder. The example of the problem is the rebellions in the United Kingdom, which are doubled this year. The best thing is to create a precise structure or process to depict the equal cash flow and shareholder equity. With the successful execution of this principle, the investment can be increased, and it looks bigger reward for the company (Folsom, Gordon and Alstine).
Focus on gathering knowledgeable people
In the international business, the company cannot know everything. Moving to the Netherlands with the headquarters is not a good option because it is not mutually concerned. In other words, shareholders, especially investors, have much knowledge about the market and the impact of this big shift. The collective decision making is missing in this company. If the firm intends to contain the collaborative decision-making process, it can navigate several options, ideas, and thoughts. The best thing for the company is to enhance knowledge through the shareholder’s collaboration to make effective decisions, which can be generally accepted (Haden).
Carry assets that Increase Value
The impact of asset managers is also visible. The international business of Unilever needs to carry the assets that create value for shareholders. In this case, the profile of the company is at a big risk. Asset managers, being shareholders of the company, have the concern about this proposal. Thus, keeping the headquarters in this region is a good option for the company to increase the value, not only for asset managers but also for all key shareholders. The most important thing for the company is to increase the value of assets, which can attract international investors make positive investment decisions (Mooney).
CONCLUSION
In the end, it is to conclude that the Unilever is facing the issue in the corporate governance process. It has created a negative impact on shareholders. These shareholders are more vocal than before, even more, than they were in the financial crises. By integrating with these international business principles, the firm can improve the corporate governance and satisfy shareholders. In the international business, investments are necessary to expand the business, and therefore, some thoughtful considerations are mandatory to enable long-term business sustainability.
Work Cited
Folsom, Ralph Haughwout, et al. Principles of International Business Transactions. West Academic Publishing, 2017 .
Haden, Jeff. “8 Business Principles That Never Go Out of Style.” INC. INC, 6 March 2013. Web. 18 October 2018. https://www.inc.com/jeff-haden/8-timeless-business-principles.html.
Mooney, Attracta. “Unilever U-turn shows how angry shareholders are securing change.” Financial Times. Financial Times, 14 October 2018. Web. 18 October 2018. https://www.ft.com/content/d7211dba-ce21-11e8-9fe5-24ad351828ab.
+447462439809