The Organization for

Economic Co-operation and

Development (OECD) Principle
of Corporate Governance

Topic :

Strategic Focus

Operating Performance ratio

Shareholders Return

Corporate Citizenship

Implementation of Corporate Governance

Group 6

Leader:
Manajo, Sheila Mae U.
Members:
Pitogo, Ivy
Pamote, Lodemer G.
Rendon Jr.,Eduardo
The Organization for Economic Co-operation and Development (OECD)

Principle of Corporate Governance

This topic is all about the Strategic Focus, Operating Performance ratio,

Shareholders Return, Citizenship of Corporate Governance and Implementation

of Corporate Governance.

The mission of the Organization for Economic Co-operation and Development

(OECD) is to promote policies that will improve the economic and social well-

being of people around the world.

The OECD provides a forum in which governments can work together to share

experiences and seek solutions to common problems. They work with

governments to understand what drives economic, social and environmental

change. They measure productivity and global flows of trade and investment.

They analyze and compare data to predict future trends. They set international

standards on a wide range of things, from agriculture and tax to the safety of

chemicals.

They also look at issues that directly affect everyone’s daily life, like how much

people pay in taxes and social security, and how much leisure time they can

take. They also compare how different countries’ school systems are readying

their young people for modern life, and how different countries’ pension systems

will look after their citizens in old age.

Drawing on facts and real-life experience, we recommend policies designed to

improve the quality of people's lives. They work with business, through the
Business and Industry Advisory Committee to the OECD (BIAC), and with labor,

through the Trade Union Advisory Committee (TUAC). They have active contacts

as well with other civil society organizations. The common thread of our work is a

shared commitment to market economies backed by democratic institutions and

focused on the well being of all citizens.

Strategic Focus

A marketing strategy in which a company concentrates its resources on entering or

expanding in a narrow market or industry segment. A focus strategy is usually employed

where the comopany knows its segment and has products to competitively satisfy its

needs. Focus strategy is one of three generic marketing strategies.

The OECD strategic focus is on helping governments around the world to, first is

to restore confidence in markets and the institutions that make them function.

Second is to re-establish healthy public finances as a basis for future sustainable

economic growth. Another is to foster and support new sources of growth through

innovation, environmentally friendly ‘green growth’ strategies and the

development of emerging economies. And last Ensure that people of all ages can

develop the skills to work productively and satisfyingly in the jobs of tomorrow.

www.oecd.org

Operating Performance Ratio

It is intended to measure different aspects of an organization’s core operations.

The focus of these measurements is on the efficient use of resources to generate

sales, as well as how well assets can be converted into cash. A business with
excellent performance ratios can generate a high level of sales with relatively few

resources, and generates a high level of cash flows.

The essential operating performance measurements are the Fixed asset

turnover, this ratio compares revenues to net fixed assets. A high ratio indicates

that a business is generating a large amount of sales from a relatively small fixed

asset base. The formula is net sales divided by net fixed assets. Another is

Operating cycle, this is the average period of time required for a business to

make an initial outlay of cash to produce goods, sell the goods, and receive cash

from the costumers in exchange for the goods. A company with an extremely

short operating cycle requires less cash to maintain its operations and so can still

grow while selling at relatively small margins. And the Sales per employee, this

ratio compares revenues to the number of employees. A high ratio indicates that

a business is creating a large volume of sales with a very few employees. The

formula is net sales divided by the number of full time equivalents. The ratio can

yield false results if a business is outsourcing a large amount of work or using a

large number of contractors

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Total shareholder return (TSR) (or simply total return) is a measure of the

performance of different companies' stocks and shares over time. It is calculated

by the growth in capital from purchasing a share in the company assuming that

the dividends are reinvested each time they are paid.

Shareholder return is calculated pre-tax and assumes that all dividends are

reinvested.

When you reinvest your dividends, it means you use all or part of the dollar value

of your dividends to buy new shares of the company. This enables you to

increase your shareholding in the company.

Some stocks may see larger capital growth but pay lower or no dividends, while

others may have a lesser increase in share prices but offer higher dividends.

By looking at a company’s total shareholder return, instead of merely its share

price changes, you can work out how well an investment has performed over

time.

On the Australian Securities Exchange, ‘price indices’ measure only the increase

or decrease in prices. To calculate both the price changes and dividend income,

you’ll have to look for the ‘total return indices’ or ‘accumulation indices’.

For example, the benchmark S&P/ASX 200 Index measures only the price

changes, while the S&P/ASX 200 Total Return Index calculates both price growth

and dividend income, assuming that all dividends are reinvested.

While it can be useful to compare the total shareholder returns of two different

companies, keep in mind that past performance is not indicative of future

performance. A company that performs well over one year may not repeat that

the next year.

https://www.investopedia.com
Corporate Citizenship

Involves the social responsibility of business, and the extent to which they meet

legal, ethical and economic responsibilities, as establishments by shareholders.

The 5 stages of Corporate Citizenship are Elementary stage, Engaged stage,

Innovative stages, Integrated stages and the Transforming stages.

The Elementary stage is a company Citizenship activities are basic and

undefined because there is scant corporate awareness and title to no senior

management. While the Engaged stage are companies will often developer

policies that promote the involvement of employees and managers in activities

that exceed rudimentary compliance to basic laws. And the Innovative stages the

Citizenship policies become more comprehensive, with increased meeting and

consultation with shareholders and through participation in forums and other

outlets that promote innovative corporate Citizenship policies. Another is

Integrated stages the Citizenship activities are formalized and blend in fluidly with

the companies regular operations. Performance in community activities is

monitored and these activities are driven into the lines of business. And

Transforming stages are once companies reach the transforming stage, they

understand that corporate Citizenship plays a strategic part in fueling sales

growth and expansion of new markets.

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Implementation of Corporate Governance

Corporate Governance is the development of framework that effectively manages

the relationships between the shareholders and board of directors. The best

practice directly enhances trust, safety and value creating

Governing Bodies in order to incorporate this practices and consequently fulfill its

commitment to transparency and business ethics required the following:

1. Shareholders / General Meeting the supreme organ of expression of

shareholders will. The decisions concerning the matters with in their competence

are adopted through majority.

2. Board of Directors the composition, meeting scheduler and internalize

regulations of Board of directors are defines in specifics clauses. They also

abided to the applicable recommendations of the good governance code. They

made up the following 7 board members of which 3 are executive directors.

3. Management / Executive Committee the main functioning consists of defining,

implementing and valuating the strategic and operational plans of the company

approved by the board of directors.

How to implement good corporate governance? Make no little plans; they 110

magic to stir men’s blood. (Daniel Hudson Brnham)

In the corporation world, however bigla plans require a bigla effort. Corporate

governance is designed to help companies make smarter decision according to

the letter of the law.

I. Build a strong board of directors- Responsibility for overseeing your company's

affairs, and should be comprised of experienced, passionate people who

possess the time and energy needed to fulfill the role. Educate them with the

competitive landscape and jeep them engaged to maximize the value of each

director's unique perspective.

II. Foster royalty and trust- a company's royalty is, above all else, to its

shareholders. The secret lies in collaboration and an open dialogue.

III. Streamline processes-Its viral that companies have a system in place to set

and carry out the board’s agenda and activities. Corporate governance isn't a

one-size-fits-all solution. But keep equipped to execute your company's plans big

or small.

www.eptisa.com
References

2018, January 2.Operating Performance Ratios.Retrieved from

https://www.investopedia.com
2018,June 16.Total Shareholders Return.Retrieved from
https://en.m.wikipedia.org
About the OECD.Retrieved from www.oecd.org
Chen, J.2018,July 20.Corporate Citizenship.Retrived from
www.investopedia.com
Implementation of Corporate Governance.Retreived from www.eptisa.com
Kelton, W.2018,July 5.Total Shareholders Return
TSR.https://www.investopedia.com