In the business world today, it is exceedingly important to have due diligence and corporate governance, these regulations have grown in stature in terms of scope and meaning, actually their implementation has common characteristics due to the regulatory and voluntary framework that are emerging throughout the world (Spedding 2008). Economically these regulations have come to involve most of the aspects of corporate behavior, but there is a need to demonstrate improved corporate regulation and governance in the wake of persistence scandals that continue to rock the corporate world, all organizations despite their magnitude or locality, should embrace these issues and uphold them. It makes sense completely to uphold and respect due diligence and corporate governance in the corporate world we are living today.
The practices and choices that we undertake in the organizational setting have a serious implication on the well-being and safety of the staff, the community and the country at large. These practices and choices that we undertake must be based on a rigid form of integrity, quality and the set norms (Marsh n.d.). Management modes that comply with the code of conduct have to maintain the safety and the well-being of the staff and the community as well as look out for the surrounding. In addition to this they have to attain the regulatory framework in the vicinity, this will minimize the effect of not complying and acquire a conducive working environment which will consequently lead to success.
Diligence is a shield to protection, that is, ensuring your job and what you’re accountable are undertaken in accordance to policies and legislation. In the Canadian law, a company or staff that has violated the due diligence law may use the due diligence to protect him or herself by proving that they followed reasonable procedures so as to hinder the offense (Linda S. Spedding 2007). What comprises “all reasonable procedures” will contrast depending on the circumstance and the size of risk in addition to form of harm.
Due diligence is applied in a wide range of instances varying from level to which there are assets exchanged and the establishment of obligations. It is similarly worth noting that aspect of due diligence is not applicable in all aspect of the similarly. The aspect of due diligence is needed for an organization’s sale the document is not meant not to be done wholly but selectively. It is of consideration that the level and strength of the procedures will have to be followed based on the size, value and benefit of the transaction, with keen consideration placed on the human resources (Spedding 2009). Present to each of the categories that play part to the process. a case in point is a deal that is composed of an organizational buying headed by the chief executive of the buyer, the finance director of the vendor’s section of the companies and a partner from all of the purchaser’s and vendor’s lawyers and accountants, the enterprise that is concerned with the due diligence teams and information centers are not of relevance in this case.
The aim of the legal due diligence by the buyer or group is to make it clear that the goods have a value that is connected to them. Moreover, it should ensure that the seller has a proper title that he or she has allocate to those assets that are being required. This limits the risks while adding liabilities or commitments that are connected to the goods. Such a move would facilitate the reduction of the value of goods that are being used. Lastly, lack of sense of potential liabilities goes a long way to implicate the product of due diligence of person. It is therefore of consideration that the main aim of legal due diligence is the verification of legal matters and perfect standing of the target that will have an effect or even verify the considerations allocated to them.
The procedure taken for the due diligence in the corporate instance is concerned with a wide range of issues, among them; the products, employees, market and company individual among others. This is normally done in the order of priority. The process has received warranties and indemnities that issue assurances of the persons concerned. The verification method minimizes the implication for conflict as the problems are in a position of being noticed at an earlier stage (Tracy Isaacs 2011). A case in point is when the seller does not have knowledge of the matters that are coming up as a result of the due diligence procedures. It of significance to note that the warranties and indemnities allocated by the seller are in most cases qualified in some aspects like: being subject to time limits and stays for a number of limited years through the operation of the law and contract. Another case is the small amount of time; composing of a high liability in the warranties and a number of claims. Another case is when the compensation is not complete as a result of the disagreement of the of the claim or limiting method of computing the damages in addition to the complexity of computing the accuracy of the compensation like in the instance of a loss in brand reputation. Consequently, when a dispute arises there leads to an expensive and loss of resources among others.
The process that is taken to be reasonable will vary depending on the variations in science and technology, rules a community needs (W. H. Jennings 1979). In case there is non-compliance with limited standards of concern noticed by the organization is big evidence for being not considerate of due diligence. In the case of deviation from the organizational standards, the due diligence law does not apply, if there are better reasons for applying them and complying with the organizational standards they are not most often applied as they show a good sense of due diligence.
It is not complete to issue out evidence of a proper regard to safety, although it may be necessary at times. The leaders of the organization should be in a position to demonstrate precaution that the facilities or procedures applied adhere to the operative and regulatory framework. No organization which operates health hazards are able to undertake their operations with no considerations for the due diligence strategy. It is through this strategy that programs are frame worked in accordance with compliance doing not serve the interests of the enterprise in the most efficient manner. The implication of an efficient and effective due diligence strategy are many. It plays a significant role in adding value to an organization’s opportunities of evading accidents, of reducing the implications of accidents that happen and acquiring an advantageous outcome in court if prosecuted.
Atomic Energy Canada Limited (AECL)
Atomic Energy Canada Limited (AECL) is an energy company that follows the statutes and regulations, comprising Nuclear Safety and Control Act, Canadian Environmental Assessment Act, Canadian Environmental Protection Act, Canada Labour Code and Fisheries Act. These statutes are concerned with the penalties if one breaks these regulations that may involve fines or time in jail. Leaders of various organizations are supposed to be in accordance with these regulatory compliance statutes so as to ensure proper health, well-being and protection of the surrounding. AECL is a company that has forever to follow or comply with the federal regulations.
For a company to be in a position to acquire the improving needs of the regulators and hinder the breaches of regulations that may result to prosecution, the AECL and its staff are all meant to be diligent. The leaders and staff of an organization are supposed to have the skills and experience of the needs either with the application of regulations or otherwise with the application of policies as processes that will meet the organization’s standards for compliance. The AECL head staff and other staff are all personally placed accountable for going against what they personally adhere to, these acts happen due to the processes that they have management capability or otherwise placed liable for.
When these leaders issue out responsibilities, they acquire the duly diligent aspect and character. These results due to their ability to indicate that the individuals they have chosen are competent and have a substantial amount of knowledge and access to resources. This facilitates effectiveness and efficiency during the inspection and reporting of the available system. It is not just at specific times that leaders are meant to show he or she has applied these actions in their area of jurisdiction, but it is supposed to be at all times. These do go a long way to handling matters that deal with non-compliance (Tracy Isaacs 2011). The head staff need to be on the constant check of their processes, notice problems and resolve them in the smallest time possible. The head office team is meant to be able to, in the best known way possible, define responsibilities and own reporting provisions so that the relevant sectors of the government are able to get information of any imminent non-compliance.
The staff, on the other hand, should have the capacity to report any form of non compliance to organizational policies. They are then responsible to report this matter(s) to the relevant office for the effective and efficient processes to be undertaken. These may be made possible by offering the staff resources and skills for handling the risk as well as prevent and solve it. The leaders are meant to act in the most appropriate way so as to resolve these issues and issue the needed resources to their staff. In the instance where other resources are needed the leaders should be in a position to acquire them or pass the communication to the relevant authority.
Corporate organizations face a substantial amount of risks; the classic theory has selected a number of risks that the business organization faces in the global market situation. There is the market risk, the competitiveness of the organization’s product and services in the market place as based on the attractiveness and workability as well as fitness of the client. There is also the reputational risk that is focused on the lack of good will in the organization’s trademarks and client loyalty which underpin repeat business and revenue.
The organization is also faced by operational risk that incorporate resources management that are not of financial correlation like for instance the internal operational risks, which is the inability to acquire the required persons, procedures and technologies that manage the organization’s competitive advantage. There is also the supply chain risk that means the lacking of business continuity and lack of positive attribution as a result of the failure of suppliers to send products and services to acquire the desire of clients and needs.
The most sensitive of them all is the financial risks that compose of the liquidity risk. This happens when an organization does not have efficient operating capital that can facilitate the payment of financial matters as required. However, there are times when the clients don’t pay their dues. This situation arises due to credit risk as well as financial market risk.
The changed face of Corporate Criminal Liability
The last days of the parliamentary session of 2003, in correspondence to liability of corporations and other organizations parliament enacted Bill C-4S to amend the criminal code, the Bill entails a basic change, if not a revolution, in corporate criminal liability (Ken Jull n.d.). It covers not only corporations, but unions and all other stakeholders in the business society Spedding, Linda S. The Due Diligence Handbook: Corporate Governance, Risk Management dnd Business Planning. Ontario: Butterworth-Heinemann, 2008.