Governance structure
Executive Summary
The corporate Governance guides the management of the organisation to work in the well-formulated approach. The governance strategy is formulated with the combination of rules, laws and processes by which the corporate is learned. These rules are incorporated with various internal as well as external factors that help to strive in a highly competitive environment. Companies continuously strive themselves to reinvent and prepare themselves to be in this fierce competition by standing firmly by using this competition as an advantage. It is highly required to implement the strategic principles in planning to achieve the goals. But implementing the strategic planning in such an environment is very challenging, and it is highly required to have a thorough research before applying strategy in the concerned organisation. To achieve this, the concepts of the simulation are used. The various models of simulation in management help in understanding the reason of reaction of human beings on specific changes that relate to various commercial, financial, personal, political etc., that help the companies to take decisions in a more logical way that help to achieve the fruitful results. This management report will present the utility of good governance practices in the strategic management in merging of the bank in an effective manner.
Table of Contents
1.0Introduction 4
2.0Merger Strategy 6
2.1 Integration Plan 6
2.2 Strategic approach………………………………………………………………………………………………………………………..7
2.3 Cultural Differences……………………………………………………………………………………………………………………8
2.4 Resistance to change…………………………………………………………………………………………………………………9
3.0 Stakeholder Analysis…………………………………………………………………………………………………………………….10
3.1 Power Interest Evaluation…………………………………………………………………………………………………..12
3.2 Stakeholder Influence Network …………………………………………………………………………………………13
3.3 Stakeholder communication plan………………………………………………………………………………………14
3.4 Stakeholder Management Plan………………………………………………………………………………………….15
4.0 Governance Framework and value creation 16
4.1 Benefits of Governance 16
4.2 Corporate Governance 17
4.3 Project Governance………………………………………………………………………………………………………………..18
5.0 Lessons Learned and Recommendation…………………………………………………………………………………………19
6.0 References…………………………………………………………………………………………………………………………………20
1.0 Introduction
Corporate Governance is a systematic procedure that provides the mechanism that helps in making and implementing the decision to achieve the objectives. Corporate Governance provides the management processes to meet the performance objectives while considering the stakeholder interest. It helps in highlighting the importance of credibility, transparency and accountability. A well-governed organisation provides excellent results and high quality information that helps them to ask right questions and could give correct answers. There are various approaches and techniques that help in developing a good governance structure for the organisation based on defined methodologies and strategies. Here this report will present the corporate governance plan with the merger plan.
By using the approach of corporate Governance, the risks and uncertainty can be countered in the best way. The governance management provides the framework of policies, the charter of responsibility, code of business conduct, the value system of the company, leadership skills and governance council that helps in the smooth functioning of the organisation. Further, it also helps in understanding the impact of the variance on the deliverables or the outcomes of the inclined project. Corporate Governance is a set of policies and a set of standard practices that helps in achieving the goals. The fundamental principle of good Governance is honesty, transparency, accountability, responsibility, independence, fairness and most importantly, social responsibility in decision making. Corporate governance management is usually done on the lowest factors to understand the effect of wrong policies on the outcome of the project. Most importantly, the corporate governance management provides the opportunity to the organisations to mitigate those risks and achieve the business goals in a strategic manner. To provide a strategic approach is used in project management when it is not feasible to rely on accurate data to generate the result.
1.1 About the Merger Companies –
Northern Bank
The Northern Bank was founded by Brothers Jim and Thomas Mown with a group of local Entrepreneurs in England in 1961. By 1991 the bank Acquisition and new opening of the bank helped in expanding the branch network by 40%. The bank has developed itself into one of the most appreciated Bank in England. It provides the services for both Personal Banking as well for Business Banking. In Business Banking it gives the facility of Deposit Account, Mobile and Online Banking, Business Loans, Cash Management, Merchant Services, 1031 Exchange, Insurance, Business Investment and Business Banking Team. Further, in the section of Personal Banking, it provides the facility of Deposit accounts, Mobile and Online Banking, Home Loans, Investments and Personal Banking team. It gives the loans for mortgages too. They offer an entrepreneurial approach to the business houses for better results in their business.
Southern Bank
The Southern Bank is owned by the Sothern Bank shares (N.C.), it has its corporate headquarter is located at the Mount Olive. The most distinctive feature is its innovativeness and convenient banking with individual attention to its every customer. The bank provides its services for Personal banking, Business Banking, Home loans and Investing. In section of personal banking the Southern Bank provides the facility of personal checking, personal loans, and Mobile Banking, credit and debit cards, online banking, saving money market &CD and Branch services. In the section of Business banking, the bank provides the facility of Business Banking, business checking, loans, mobile business banking, saving and money market, Treasury services and Visa business credit card. Along with this, the bank also provides home loans for montages and other advisory services. Along with this, the bank also provides the facility of consultancy for investment to its customers.
Business Case
The Northern Bank is planning to take over the Southern Bank and merge the Northern Bank with the Southern Bank. The aim of the merger was to gain competitive advantages over the competitors in the market and to expand its business. With the help of simulation techniques, the analyst is finding out whether it will be a profitable business deal or not. As discussed in the above section, that simulation is an analytical mathematical tool in the project management that helps in understanding the impact of the variance on the deliverables or the outcomes of the inclined project. Variation constitutes of the various unforeseen and unexpected events that may put the effect on the schedule of the project and can cause a delay in completion of the project too.
Here in this project, various elements took for analysing the prospect of this intended takeover will provide expected results or not. Most importantly, it will be determined whether this merger will be beneficial or not. It will help to understand the human behaviours and most importantly, can able to make decisions depending on the results.
2.0 Merger Strategy
Developing corporate Governance in the fiercely competitive environment is very challenging. The sound strategic planning can help the merger from failure. Merger and acquisition strategy is essential for deriving the maximum benefits from the consolidation in the organisations.
2.1 Integration plan
According to the information collected through the analysis, the Northern Bank had developed a draft for an integration plan. They had briefly mentioned the tasks to be performed in the merging process and had also specified the role of the critical stakeholders too.
The integration plan for the project is as follows-
Step1- Understanding the trend of the market and future demands
It is one of the most challenging tasks for any business organisation. This becomes highly challenging in understanding the suppliers, competition advantages and market trends. Without understanding the future scope, the success for the long term cannot be achieved.
Step 2- Understanding the allocation of resources among the merger company employees
It helps in addressing the techniques for managing the resources to maintain the efficient operation of the work in merging organisations. The news published on 29 Nov 2018 gives the information that the Southern Bank system and infrastructure will not be kept the same after the takeover. It means they will adopt new technologies and will bring changes according to their policies in the I.T. infrastructure.
Step3- Developing the future structure of the company
This is a most crucial task for any organisation, as both the organisation follow their own individual style of work pattern and it requires to accept the best features of both the companies so that conflict among the stakeholders can be avoided.
2.2 Cultural Difference
Both the companies either it is Northern Bank Southern Bank have their own work culture and policies. Many employees who are working for many years and have played a pivotal role in developing these policies will be going to suffer a lot of combined systems with approval from both the companies are not established.
2.3 Resistance of Change
The analysis result reveals that many employees are resisting changing and will either leave the company or will raise many issues. This resistance among these employees will create many problems for the organisation in its smooth functioning.
3.0 Stakeholder Analysis
3.1 Power Interest influence
| Key stakeholders | Role Within the project | Decision-making power |
| C.E.O. of Northern Bank | Integration of banks | The C.E.O. of the Northern Bank is the key stakeholders and accountable to integrate the banks |
| C.E.O. of Southern Bank | Cooperating with the Northern Bank for taking adequate decision for the merge project | The C.E.O. of Southern Bank needs to make crucial decisions for the project |
| Project Leaders | Successfully executing the plan and managing the members of the project | The project leaders need to integrate stakeholders decision with the merge project |
| Government | Providing a legal framework for the project and the firm’s activities | The project needs to follow the legal framework provided by the government |
| Managers of Product Portfolio | Managing the banking services according to the demand of buyers | The banking services needs to change according to the needs of consumers |
3.2 Stakeholder Influence Network
Power
| Finance Rules Policies
| Legal framework
Banking services |
| Interest of stakeholder
Focus on activities | Transparency
accountability |
Interest
3.3 Stakeholder Communication plan
| Key stakeholders | Role Within the project | Mode of communication | Frequency |
| C.E.O. of Northern Bank | Integration of banks | Email, Reports, round table meetings | Email daily, meeting weekly |
| C.E.O. of Southern Bank | Cooperating with the Northern Bank for taking adequate decision for the merge project | Email, Reports, round table meetings | Email daily, meeting weekly |
| Project Leaders | Successfully executing the plan and managing the members of the project | Email, Reports, round table meetings | Email daily, meeting weekly |
| Government | Providing a legal framework for the project and the firm’s activities | Monthly |
3.4 Stakeholder Management plan
- The management of the reaction of Southern bank Key Stakeholder’s over the H.R. Policies implementation after the takeover
The information collected through interviews and questionnaire depicts that the Southern bank key stakeholders have mixed reactions on the implementation of H.R. policies in Southern Bank after the takeover. One of the critical members desires to listen to the employees about H.R. practices before making any new decision over the implementation of the H.R. practices in the bank. Another head wants to retain some of the highly capable employees as they will provide benefits to bank with their skills shortly too. But there is also another critical member who suggests removing current H.R. practices after the takeover; maybe she feels due to failure of these policies the bank has to suffer such high financial loss and has to make its bank to be take- over by Northern Bank. The worry and concern about good employees of the Southern Bank are also visible among the Human Resource team.
The above reactions of the critical stakeholders depict that the Northern Bank has to prepare a more concrete proposal to ensure the key stakeholders that their views and benefits will be equally respected and retained. The above reactions clearly describe that there are still many doubts about the successful integration of the Northern Bank with the Southern Bank. As suggested by Menisci and Policy (2016), the business environment in which the firm’s deals needs to be understood and analysed adequately. This is a completely lacking section.
- The management of the views of Southern Bank and Northern Bank Stakeholder on the presented integration plan
The information collected in our analysis clearly depicts that the stakeholders of the Southern Bank are not satisfied with the integration plan presented by the Northern Bank management, it requires developing more integrated and well-illustrated integration plan to convince the Southern Bank Stakeholders. The above reaction also gives an indication that they are rethinking on the decision of integration with Northern Bank.
The collected information also clearly depicts that the Northern Bank management team has not still prepared a practical plan for integrating the southern bank with the Northern Bank. The proposal is in the form of an early draft, and even many details of various information are missing. Integrating one organisation with others requires a systematic plan with practical strategies referring to the long term goals. It is also necessary to make the employees of taking -over the company in the confidence so that they work without confusion, and their calibre can be used in an effective manner.
According to our analytical study, the Integration plan that has been presented to the team of both the banks that is displaying the integration information is in the concise form. After viewing this integration plan, we can conclude that the issues raised by the Southern Bank stakeholders are appropriate. This merely is brief information about the plan. The integration plan should be more elaborated and in a detailed form. The work breaks down the structure; milestones to be achieved is not clearly specified. How the different sections of both of the banks will be integrated that will be beneficial for both the banks has not been presented.
- The assurance provided by the Northern Bank on the above-raised issues by the Southern Bank Team
When we discussed the above-raised issue with the key stakeholders’ of the Northern Bank, they assured that the team of Northern Bank would maintain the policies of the Southern Bank with integrating their policies with them to bring more innovative practices and providing more benefits to the customers through this integration plan. They are also very clear about their I.T. strategy that should be aligned to the overall business strategy. Moreover, the team of Northern Bank is also giving ample time to Southern Bank to rethink about the decision and consult with the team members at the Southern Bank.
The collected information through analysis presents that Sue Beckerman has promised to give more detailed Integration plan to the Northern Bank, so their doubts and disbelieve can be eliminated. The analysed conversation through email depicts that the effort put by the management team of Northern Bank to convenience hem about the integration plan is in the concrete form and appealing.
- Technology doubts are prevalent through the I.T. department of both the banks
There are various Technology related doubts in the organisation and stakeholders. The management is very apprehensive in adopting advance technology.
- Customer and Shareholder Reaction on this Merging
The customers of Southern Bank prefer to use the same policies and are uneasy in using new methods of bank transaction processing. The shareholders are also in doubt on this integration plan. They are proclaiming that several problems will arise due to this merging. The regulator is advising to retain and leverage the critical processes of the Southern Bank during integration.
Overall view of Northern Bank
The critical management team of the Northern Bank is also in doubt about merging with the Southern Bank in such confused environment that this merging will be beneficial or not. One significant fact through their extensive research is clear that the Northern Bank has to work on all aspects from Technical handling to customer services in an exact manner to obtain the fruitful results.
4.0 Governance Framework
The governance framework is a structure that delineates the power in the Governance and helps in defining the roles in the effective management of an organisation. In any organisation, the governance framework helps in determining the rules, procedures and other guidelines. The framework elements are shaped with the help of set rules, procedures and other informational guidelines. It helps in effectively utilising the framework.
4.1 Governance Elements Recommended
| Environmental Elements | Current facts | Assumption or research needed | conclusion |
| Organisational values, objectives and policies | The personal values of the organisation are not clear. The amount of control over critical management issues is also not precise. Policies are also lacking. Only one objective is appearing of takeover the southern bank. | It is highly required to examine the personal values, plans, goals to define the conditions in a perfect way. | The success of the project can be achieved only after maintaining the personal values and policies. |
| Marketing Organizational Design | The marketing of the services of the bank is very straight forward. | It is highly required to develop better organisational design to achieve the goals. | The modern approach in integration of the banks is highly recommended. |
4.3Technical Environmental updating Recommendation
| Technical Elements | Current facts | Assumption or research needed | conclusion |
| Adoption of advance Technology | There are numerous Technology related doubts in the organisation and stakeholders. The mangement is very apprehensive in adopting the advance technology.
| It is highly required to adopt that Technology that is more suited to this environment. The selected technologies should work in similar manner as current technologies adopted by the bank but with more features and advance services. | It can be concluded that in order to convince the Southern Bank’s Management team and to clear the doubts of the Northern Bank Stake holder’s it is highly required to adopt the technologies after doing vast research and those technologies that assure to provide the satisfied results, |
| The Apprehensiveness of Team in adopting the advance technology | The team members of both Southern banks as well Northern Bank in adopting the new Technology as they fear that they will lose their work quality after going out of their convenience mode. | It is required to adopt the Technology that firstly provides the high level of user friendly approach and complete training to the team members should be provided so that their doubts about new technologies can be eliminated. | It can be concluded that a strategic approach is highly required to adopt while implementing a new technology in the merge environment. |
4.4 Integration plan updating Recommendation
| Integration plan Elements | Current facts | Assumption or research needed | conclusion |
| The structure and information in the Integration plan | The integration plan information is given in the concise form. This is simply brief information about plan. How the different sections of the both of the banks will be integrated that will be beneficial for both the banks has not been presented.
| The integration plan should be more elaborated and in detailed form. The work break down structure, milestones to be achieved is not clearly specified. A more detailed plan is highly required to develop. | After viewing this integration plan we can conclude that the issues raised by the Southern Bank stakeholders are appropriate. The southern bank has to prepare more detailed plan with clear specification of all the required elements in the understandable form so that the doubts and issues raised by the stakeholders of both the banks can be eliminated. |
Lessons learned and recommendation
By using the approach of strategic mangement the risks and uncertainty can be countered in the best way. By adopting the corporate governance mangement approach in the project mangement will help in understanding the impact of the variance on the deliverables or the outcomes of the inclined project. Actually variance constitute of the various unforeseen and unexpected events that may put the impact on the schedule of the project and can cause delay in completion of the project too.
We can conclude that by adopting the techniques of strategic mangement the current scenario of the merging of both the Banks could be easily examined. With the help of analytical results the decision that can help in developing the project in better way can be achieved. Along with this it also helped to highlight the potential risks in better way. The knowledge and experience obtained through this assignment will be beneficial in our entire career.
The Governance actions required to implement to have better decisions-
Southern IT systems-Replaced:
A fully efficient team and technological development would ensure the organisational success and the success of the merger of Northern and Southern Bank. The I.T. director is mainly responsible for making such important decisions.
Southern Loan Approval-Replaced:
The process or approaches undertaken by Southern Bank should be made efficient by incorporating modernisation. Through the retail customer base of the Southern Bank is strong it faces several issues with its commercial portfolio as it is very weak than its competitors.
Product portfolio-rationalised:
The product value should be increased in order to make the product portfolio strong. Therefore, the strengths and weaknesses of the products would be assessed and necessary changes would be performed.
Development of more elaborated Integration plan
The Management Team developed more elaborated and detailed integration plan by adopting the suggestions given by both the team so that understand ability can be developed among both the teams.
Risk Management
All the possible risks are measured as discussed part –A of the report and proper risk mangement plan was developed to provide the assistance to the team in managing the risk.
Rules for communication
A proper communication platform is required to develop and all the employees and stakeholders should be well informed to use this channel for proper communication so that confusion in work
Rules for work Allocation
All the delegation of the work should be done based on the skill level with giving full opportunity to the Southern Bank employees.
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