Fundamental Principles Of Corporate Governance

Fundamental Principles of Corporate Governance

Introduction

The main objective is to identify the principles of corporate governance assumed by the Organization for Economic Cooperation and Development (OECD) and implemented by the multinational Corona in relation to its organizational practices. Corona is a national and international reference, with more than 130 years of existence under standards of quality, efficiency, growth and development, efficiently managing and controlling its resources.

The article describes Corona’s trajectory over the years, its good governance policies and the impact caused by the implementation of the corporate governance model in this company, coinciding with the proposed action from the OECD.

Developing

It is then to identify how a controlled and properly managed company with effective succession plans can reach the sustainability point in which it can transcend over time, taking into account that data provided by the Superintendence of Companies in 2018,49.4% (3.183 companies) belong to family companies and 67.4 % are in the hands of the first generation.

Of the 3.183 on 28.3% is directed by the second generation, the 3.5% for the third generation and 0.8% of the fourth generation onwards. Also only 36.4% have a protocol and 53% of this group consider that they are not mandatory.

The indicators of the Superintendence of Societies show the need to define corporate governance schemes for each of the family companies in the country, since this gives them mechanisms for growth, sustainability and lasting over time.

The general objective starts from identifying the principles of good governance assumed by the OECD and that applies Corona, in order to understand the reasons that have positioned it as a company.

In turn, they hosted as specific objectives:

1.  The trajectory of the Corona company was analyzed on the time of time.
2.  The principles of good governance prescribed by the OECD were identified.
3. The role of professionals in public accounting for the identification of some of these principles was characterized.
4. Leave a space for research methodology.

The importance of implementing corporate governance in companies can be a determining factor in the creation of value. Recent studies indicate that those companies with a solid good governance system give better financial results and are more competitive. (Deloitte, 2012)

The obvious concern about organizational bad practices, the bad act of the human being and instability in financial systems led to the OECD establishing principles that have been referenced in the creation of corporate governance codes and guides around the world,In order to promote good practices, such as: a) the rights of users’ rights and equitable treatment, b) Consolidation of corporate governance, c) the role of interested parties, d) the dissemination of data and transparency, e) the responsibilities of the Council. f) Stock market and other intermediaries.

These principles are the initial basis indicated by the steps to follow for the construction of best practices and thus be able to counteract frequent problems in companies, both trust, transparency and legality, with the necessary growth achieving stability and safety in investors.

The above leads to ask, what principles of corporate governance assumed by the OECD have facilitated the management of the multinational crown and its market consolidation?

CORONA ORGANIZATION TRAJECTORY

Corona is among the few companies that were born more than a century ago. In its beginnings it manufactured items made in crockery and ceramics taking advantage of the Antioquia land.

Its origins date back to the end of the 19th century. Home work in a humble and small Loza factory, founded by Mr. Victoriano Restrepo and his son. 12 assistants and broken furnaces that were their only heritage, also accompanied them endless difficulties, among which is the crisis of 29 and the War of the Thousand Days.

In mid -1881 and in the vicinity of the Aburrá Valle, Colceramic, Sodimac, Arcess, Grival, among others.

In 1935 he was acquired by Gabriel Echavarría Misas, who took over her until her death in 1943.

Between 1948 and 1960 the coatings, porcelain, ceramic tile and the exploitation and commercialization of non -metallic minerals included in its portfolio of products. This process led to the organization to Madrid Cundinamarca, and from there arises the one known today as the Gamma S electroporcene.A.

Subsequently, between 1961 and 1980, the Corona organization extends to the United States market, and by 1962 a plant for the manufacture of sanitary elements is created in the manufacture of health elements, the objective of this being mass production for export to the marketESTUDINEnse.

In 1963 the shareholders created the Corona Foundation focused on education, health and housing. Similarly, Grival is created, a company designed for the production of metal faucets and plastic. Also in that period the company strengthens its projection with the creation of a machinery factory for the development of ceramic products in association with Crossley Machines.

By 1980 the construction of the most modern plant in Latin America was carried out at the time its main function is the production of floor coverings located in the municipality of Sopó near the city of Bogotá, in order to position the company in variousAmerica markets.

In 1994 it was associated with the Chilean company Sodimac to start the homecenter store chain. As innovation of this business in 1998 the formats of Crown and Ceramic Store were implemented.

Lomesa (company launched in 2001 in Mexico for the distribution of dishes) and Orchid Ceramics (company created in the USA is constituted.UU for the distribution of ceramic coatings).

Corona acquires in 2004 Mansfield LLC (Producer and Marketing of Health in the USA.Uu) and the alliance of the Panama do it center chain for the launch of the hypercentro format.

Conclusions

At present, the Corona Organization is one of the most important Colombian multinationals in the country, with alliances in different countries composed of six strategic business units, with approximately 18.398 employees, their sales exceeded $ 5.5 billion in 2018, has 29 plants that are 20 of them located in Colombia and the remaining are distributed between Central America, the United States and Mexico;as well as the organization impacts 5 continents and exports its products to 46 countries.

Corona has stood out mainly for its growth, development and innovation. Throughout its history it has not had greater economic difficulties, only when the net sales of colceamic decreased 11% in 1999 mainly due to three factors: the reduction of sales, the growth in administrative spending and finally as an external factor theCrisis of the Colombian economy when GDP fell on 4.2% due to growth in financial intermediation and the expansion of public debt, but these difficulties did not prevent a crown. In 1999 Corona had investments for more than three thousand five hundred million pesos this due to the strategic importance of the international market and penetration with new products and with greater added value.

In the case of Corona it has a clearly defined good governance structure where compliance with the norms, transparency and good relationship with employees and third parties this prevails in order to add value to their businesses, its good governance system defines fiveEssential pillars which are: ethics and values, good governance, report and transparency, risk management and information technology, each of these pillars is a fundamental part of the management that is carried out inside and outside the organization and thewhich has led her to be one of the best positioned companies in the country.

According to Carlos Enrique Moreno former president of the Corona Organization, what is best in the organization is the corporate governance system that has. They are in the fifth generation and these gentlemen have within their postulates serve the country, keep their family united, and in effect, they have achieved it. They created a system of government in which they have defined being a minority in the corporate council of the organization ”(Eafit, 2015).