In The Case Of Marconi It Is Reasonable To Argue That They Have Good

In the case of Marconi it is reasonable to argue that they have good corporate governance systems yet poor strategic management at the business level. For example its strategy of selling proven businesses and acquiring businesses which are not yet leaders in the fields had disastrous results in terms of shareholder returns as well as corporate growth (Keenan, 2004). The capabilities and skills in managing poor acquisitions for non-executive directors and the executive team were widely questioned thus decisions made by non-executive directors did not correspond well to corporate strategies. The goal of a Nomination Committee is to evaluate alternative corporate strategies and quality of CEO performance in order to ensure shareholder returns meaning it is necessary for non-executives to take part in scheduled sessions including measurement of the annual strategic plan and previous records. However in Marconi the non-executive chairperson and directors seem to have had no time to fulfil this role when the company planned radical strategic changes. Considering the 1999 Stock Option Plan and the Long Term Incentive Plan the executive team attempted to maximize the shareholder value by taking Marconi public while the long term plan sought to improve corporate performance not only in the sense of financial results but also through organisational growth.

5. TASK FIVE

French Connection Group Plc is a major fashion retailer based in the UK with a turnover of £267.9 million with total assets of £165.4 million in the 2003/2004 accounting period. There was however a decrease down to turnover of £265.7 million in the 2004/2005 accounting period. It is quoted on the London Stock Exchange and operates under the UK Combined Code (FAME, 2006). Its corporate report shows that profit before tax increased over the last five years with there being a slight decrease in 2004/2005 compared to £38.1m in 2003/2004. It is worthwhile mentioning that net tangible assets increased from £75.7m in 2001/02 to £107.4m 2006. While the gearing ratio reduced dramatically due to good performance and improved ratio of shareholders funds in relation to debt capital can be seen as a result of an increase in shareholder funds to £118.6m but return on Shareholder funds decreased by about 10% over the past five years. By the end of the 2004/2005 period French Connection fell into a low gearing group which is suggested to be more stable than companies in the higher groups. Profit margin was sustained at above 12% and reached 14.22% in the 2003/2004 accounting period (FAME, 2006).
While general performance is favourable financial results have declined slightly in performance in the most recent accounting period.