B&W Corporate Governance
Corporate Governance
Corporate governance
refers to the system by which corporations are managed and controlled. It guides the relationship among a company's shareholders, board of directors and senior management. These relationships provide the framework within which corporate objectives are set and performance is monitored. Three categories of individuals are key to corporate governance success: 1) the common shareholders, who elect the board of directors, 2) the board of directors themselves, 3) top executive officers led by the CEO." It is necessary to emphasize that corporate governance is an important issue for all corporations. After a series of recent scandals involving Enron, WorldCom, Tyco, etc, there has been a renewed interest in corporate governance. The Sarbanes-Oxley Act, passed by the US Congress in 2002, focuses on combating corporate and accounting fraud and imposes new penalties for violations of securities laws.
The company I have chosen for my paper is Brown and Williamson (B&W) Tobacco Company - the third largest tobacco company in the US . Found in 1876, Brown & Williamson (or Brown Brothers Tobacco Manufacturing Co., as it was known back then) became a partnership between George Brown and Robert Williamson in 1893. In 1906, the company was incorporated under North Carolina state law, and grew steadily in its quality brands, expanding its product line. In 1927, the company was acquired by British American Tobacco (BAT is the 2nd largest tobacco company in the world, after Philip Morris) and reorganised as the Brown & Williamson Tobacco Corporation.
In 2004 Brown and Williamson merged with R. J. Reynolds Tobacco Company and continued its operations in tobacco industry . The company has its own Code of Conduct and corporate governance policy. The case I am going to look at in this paper is directly related to the corporate policy of Brown and Williamson.
In 1989, Dr. Jeffrey Wigand was hired...
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