Sustaining Performance
& Profit
Creating value for
stakeholders
The corporation is a vehicle designed
by
business leaders and created
by law for global trade!
The
moment we incorporate a limited liability company we create a separate legal personality
with the potential for immortality.
The
secret to sustaining this immortality is to develop a governance strategy and prepare a business plan that gives maximum returns to stakeholders in the
business. This adds value and leads to maximum long term profits for
investing shareholders.
The
corporation in its most simplistic form has a board of directors and
shareholders who meet in general meeting. The directors are responsible for
directing the business of the company. The shareholders are investors who
provide capital to finance the business. Profits from the business can be
allocated for re-investment into the business or paid out as dividends to
shareholders as a return on their investment.
The expression,
“maximum profits for the shareholder”
does not capture the reality of how business is run and profits are realized in
a sustainable manner.
In
the real world a corporation that aims to profit from delivering goods and/or
services to customers in return for a price needs stakeholders.
These include financiers, suppliers, executives, managers and employees/agents
to carry-out operations that deliver to paying customers.
Investing
in communities, the environment and customers as stakeholders can further increase
profits.
In
order to ensure stakeholders perform productively, corporations should adopt
the slogan, “maximum profit for the
stakeholders”. This can be achieved through a competitive governance
strategy developed with in-put from directors, executives, managers, key
personnel and outside consultants who provide objective expert advice.
The
resulting, “Competitive Governance Strategy” will promote long
term financial performance that adds value and increases profits.
Siddha Param
International Business Consultant
Winnipeg,
Manitoba, Canada
www.WorldwideBusinessConnection.com
Co-Author of:
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