General Motors-Problems in Corporate Governance

Introduction

Large business and industrial corporations distinguish the period from the end of the 19th century extending to contemporary times , from earlier periods of history . Never has business had such a pre-eminent and influential role in society . Money-lending , which was once the sole preserve of people who took to such a vocation , is now a legitimate way of supplementing income for people from all streams of life : there were no stock exchanges before the first quarter of the 20th century

Current geo-politics is also different from any other period in history

because never has a single country exerted such power and influence over the entire globe : it follows that U .S . corporations are watched with special care , both by the advocates of free enterprise , and by former opponents as well . Every action by a large , ostensibly professionally managed company of American origin has significant potential impact both domestically and all over the world : most of these entities have operations in most countries anyway

It is in this context that this document is set , covering the business situation of General Motors (GM , with special reference to Corporate Governance . The company has conducted business for over 100 years delivers more than 9 million automobiles per annum , employees over 250 thousand people , and has yearly revenues of over 200 billion (Form 10 K , General Motors Corporation , 2007

This document takes stock of the current business situation of GM reviews concepts of Corporate Governance , and applies them to the case of this company . The document contains suggestions for the future of GM with the particular aim of giving expression to the aspirations of minority share holders

The GM Business Situation

The company has made a loss of over 2 billion in the last accounting period for which detailed accounts are in the public domain (Form 10 K General Motors Corporation , 2007 . The management has put together a plan to return to profitability in the future , which requires very significant changes in operations , structures , and systems . The management admits that this turn-around plan faces difficult hurdles and major risks . Prospects for all categories of stake holders are poor compared to other opportunities available in the market place

The company has invaluable resources , assets with high future potential , and it is in a line of business for which sustained demand is assured . People will always want new models of automobiles , and only companies such as GM have the capabilities to meet future energy emission , safety , and design norms . Already , demand from emerging countries , even for lower range revenue lines such as Chevrolet , is encouraging (Form 10 K , General Motors Corporation , 2007 similar surges can be expected from other countries , such as the ones in Africa in due course

Stakeholders are faced with a quandary with respect to GM : a continuation of past management ineffectiveness could add to their opportunity and even capital losses , while exiting share ownership and other forms of association with the behemoth at this juncture , could mean lost opportunities in the foreseeable future...