Aqua Elite Juniors: Corporate Governance Strategy
Corporate governance is recognized by several scholars as the system by which companies are directed and controlled. Akinpelu refers to corporate governance as structures developed by an organization that disseminates rights and roles among various participants in the corporation or the stakeholders (Akinpelu, 2011). An organization can take measures aligned to monitoring company actions, policies, practices, and all the decisions that affect its operations. Corporate governance is a strategic planning tool that an organization adapts in order to achieve its set objectives. An effective corporate governance strategy recognizes both internal and external stakeholders in formulating systems that will balance profitability with sustainability. In light of this, Aqua Elite Juniors is a swimming company that is located in Dubai, Al Ain and Abu Dhabi in the United Arab Emirates (UAE). The company receives at least 500 customers which translate to a 20% growth each year. With the increased growth and demand, Aqua Elite Juniors has plans to extend its presence in other cities of UAE such as Sharjah, Fujairah, and Rak in the near future. Therefore, the company requires a corporate governance strategy that will enable it steward its expansion plans and profit maximization.
Aqua Elite Juniors Swimming Company
A word from the Executive Management
- Board of Directors, Chairman
The main purpose of an organization existence is to foster positivity to the environment that surrounds it. The society is yearning for a place to offer a shade for the hot sun experienced in this country. For sure, Aqua Elite is the answer to all the relaxing moments that they need. We also play center stage in acquiring revenue for our government through taxation, marketing our sponsors, organizing corporate social responsibilities among other corporate strategies. As the Director, I am bestowed with a responsibility of coordinating our operations with all our stakeholders and ensuring growth to our organization. In light of this, we are excited to announce our mega plans of opening three new branches that will oversee continuation of our sincere services to the society.
- Chief Executive Officer
Aqua Elite is an organization that lives up to its mission and vision statements; it’s all about inspiring refreshing moments for our customers. Swimming services do not necessary refer to offering clean water in the pool, life jackets, and swimming trainers. It is more than this; it is about making the client feel at home because Aqua Elite stakeholders live like family. Not only do we offer swimming services as leisure, but also train profession athletes who represent their countries in competitive sports around the globe. Since most of our clients are youths, we keep abreast with meeting their over changing interests. For example, we hire music system and organize concerts occasionally, we offer unlimited Wi-Fi, and give them an opportunity of holding parties at the premises.
We fully understand that U.A.E is a vacation destination and that is why we have maintained a diversified culture to embrace sundry of cultures that flock this country. Similarly, we take our employees as the pillar to our success and we respect and appreciate them in a great manner. From all our three branches, employees form the backbone of our smooth rapport with our customers, sponsors, the government, and all the stakeholders. Therefore, we are geared to open three new branches in Sharjah, Fujairah, and Rak in order to diversify our services and allow flexibility for our clients. Therefore, Aqua Elite Junior is the place to be for all your swimming and sand basking leisure.
Aqua Elite Juniors is a corporation that is made up of an array of shareholders who have invested their capital together to yield positive output. Aqua is basically owned and controlled by shareholders who have limited liability for the organization. It is a profit making organization that concentrates on services and meeting the clients’ expectations.
Corporate Governance Strategy
A governance strategy ought to outline what the organization wishes to achieve after formulating the strategy. There are four main objectives at the corporate level which are supported by other operational objectives to ensure necessary regulatory framework (Harford 2012). They include transparency, responsibility, fairness, and accountability. The operational objectives vary in accordance to the end-results expected by the firm. In the case of Aqua Elite Juniors Swimming Company, the operative objectives may include:
- Assist in establishing appropriate frameworks conducive to good governance and encourage forming coherent and collaborative legislative and policy framework
- Develop structures that express the flow of responsibilities from the senior-most management all the way to the subordinates
- Assist in broadening the understanding within the hospitality sectors among the target clients
- Draft policies that ensure health correlation with the host government and attract more sponsors
Mechanism of Corporate Governance
- Internal mechanism
Internal mechanisms deal with the provisions of the board of directors and the equity ownership structure of the firm to review the internal structure of the firm. It involves taking internal measures, internal evaluation, and drafting systems that will positively impact the organization.
- Organization chart
Board of Directors
Public Relation Officer General Manager CFO
Assistant General Manager
Youth Director Commissioner Officials
The vertical organization chart segregates roles and responsibilities in a hierarchical way from the top-most level of management. It delineates who is answerable to whom and the form of communication expected from the two levels.
Shareholders put in equity to set up the business and they are referred to as the business owners; hence, they fall on top of the organizational chart. Shareholders usually nominate Board of Directors to run the business on their behalf. Our shareholders are respectful to the decisions made by the executive managers and there is separation of responsibilities.
- Board of Directors
Board of Directors set the business polices and the expected and set the objectives that the organization aims to achieve (Klapper, 2004). They also hire the executive directors such as the General Manager, Financial Officer, and Public Relation Officer among others. They make hard decisions that surpass the executives in the organization such as corporate level business strategies; for example, opening of the new branches.
- General manager/C.E.O
C.E.O runs the day to day activities and operations in the firm and responds to issues that require immediate decision making. The general manager is equally important in coordinating all the operations and procedures in the firm. He/she coordinates with the CFO in financial matters and the PRO in marketing the firm and managing the personnel. In collaboration with the C.F.O, the C.E.O drafts a budget, allocates resources, and ensures that the organization is operational in order to yield profits. General Manager is the Chief Executive Officer and is answerable to the Board of Directors (Akinpelu, 2011).
- F.O (Chief Finance Officer)
Resources require management and a CFO will help in controlling funds and making budgets. Finances remain a crucial tool for any firm and they require coordinated control and management. The C.F.O plans what the firm needs to support its operations in terms of money and how to use them effectively to generate profits.
- R.O (Public Relations Officer)
The Public Relation Officer aids in outsourcing funds from sponsors by creating and selling the brand image. Public relations are important in making a rapport with the external environment. The external stakeholders such as customers, suppliers, creditors, and the government among others need getting a good picture for them to associate themselves with the organization. In the same vein, the PRO can handle the human resource duties since the firm is not huge to warrant a HRM.
- Youth Directors
The Youth Director manages the youths since they form the largest part of Aqua customers. Youths require mentoring and counseling because Aqua is not only a swimming organization but also blends the entire societal issues.
- Commissioners/ Officials
The commissioner implements the policies set by the executives and regulations set by the organization. In some instances, external officials may be hired in special events held at the firm. They are bestowed with disciplinary responsibilities for both clients and employees. They ensure there is security and order for clients to enjoy their stay without disturbance. Commissioners’ main roles are to ensure there is law and order in the institution; they handle all disciplinary situations at Aqua Elite. Officials on the other hand act as Marshalls who coordinate day-to-day activities. Their roles are witnessed when there is a main event as they coordinate with commissioners in running daily operations.
Coaches are very important individuals in this firm; they train both amateur and professional swimmers. They ensure there is safety in the pools and teach life and first aid skills to ensure sufficient safety in the firm.
- Executive compensation
Aqua Elite will embrace the executive compensation mechanism where the top-level managers will receive bonuses for any extra work and time spent in this operation. Opening new branches requires time to conduct internal and external researches and understating the market trends (Harford, 2012). This means that the managers will be pre-occupied in order to achieve the set goals. Compensating them will be a positive thing that will motivate them in order to yield positive results.
- Capital structure
The capital structure consists of how the organization deals with its debts and equity. It is a clear concern that opening new branches will require extra funds that the shareholders may fail to obtain within the set time (Chong, 2007). Therefore, it is important to look for alternative ways that will obtain resources for funding the project. One of these ways includes sourcing for investors and sponsors through the sale of shares. It is considered an internal mechanism since it will require the consensus among the executive, board of directors, and the shareholders. Internationalization of equity is achieved by allowing foreigners to buy shares at the national stock market. It increases the liquidity of the stock which makes it easier for the shareholders to join and leave the corporation. In fact, the initial shareholders are still protected it only allows sharing of capital and debt which is easier when the shareholders are many. Additionally, this will amount pressure on Aqua management to meet international standards of accounting and reporting as it targets customers from the entire globe visiting the U.A.E.
Auditing is an important function in a capitalistic system based on corporation’s policies (Huse 2007). Finances are part of the integral foundation of any firm that needs proper usage. Aqua Elite has 10 major sponsors who invest in the firm with the aim of obtaining profits. They put in their capital to enhance the firm practices and risk losing their money. Therefore, it is important to ensure that their money is used wisely to meet the set objectives. In such instances, an independent inspector is required to secure the information given to the absent owners of shares and debt. Many firms overlook the importance of auditing making it possible for people responsible with managing the firm get loopholes to conduct frauds. Auditing is a serious business that requires employing the professionalism of the auditors. Many firms are concerned about hiring auditors because it will imply that they do not trust their employees (Harford, 2012). On the contrary, it restores trust because the shareholders are re-assured their investment is secure and generating profits.
- Board of Directors
Klapper says the board of directors includes the collection of individuals responsible with promoting the organization’s business. Currently, the general manager is the senior most individual managing the Aqua Elite firm. This means that with the opening new firms he or she might be overwhelmed with responsibilities and also he needs someone checking him. As stipulated in the organization chart, board of directors oversees the firm’s operations on behalf of the owners or the shareholders. They may be elected by the shareholders and the representatives of the employees in order to achieve diversity. They are supposed to monitor, make decisions, and provide service to the corporation through their competence and network. Board of directors is a direct link with the external environment and aid in marketing the organization.
Chong states that with the immense impacts of globalization, an organization needs to keep aligned with the changes so that it can remain competitive (Chong, 2007). To continue to thrive as a business, Aqua must understand the trends and forces that shape the business in the future. U.A.E is a hot place and the demand for swimming pool will obviously go high in the near future. It is therefore important to set values that are aligned with long-term destination.
- Mission statement
Our mission statement is to inspire refreshing moments of happiness. The company will continue to inspire the customers to enjoy their relaxing moments in the country. Actually, U.A.E is a holiday country where people come to relax and spend their vacations. This means that our mission statement is timely and effective.
Aqua Elite vision should serve the framework of all stakeholders and guide every aspect of our business. Therefore, our vision is segmented among different stakeholders in order to yield productive output.
- Employees: to be a great place of work that our workforce enjoys to render their valued services
- Customers: bring the world to a quality life of refreshing and relaxing while enjoying swimming
- Partners: nurture an exemplary network of customers, financiers, and the external world in generating a mutual and enduring value.
- Profit: maximize long-term return in order to satisfy the shareholders objectives without overlooking the firm’s overall responsibilities.
- Community: help in building an inclusive, sustainable, and responsible community
Our core values might be a cliché as they have been identified by other organizations. However, Aqua will remain committed to the ascertained values that will act as the rules and guidelines for the organization.
- Aqua leadership focuses on a collaborative world that will ensure integration among all the stakeholders. Similarly, roles and responsibilities will be outlined to avoid duplication of chores and negligence.
- Integrity: the firm discourages all forms of frauds and remains real to the employee, customer, and all stakeholders
- Diversity: ensuring that we embrace all cultures and beliefs in an inclusive environment.
- Quality: safeguarding the lives of our customers by offering quality services and products.
- Aqua is committed and passionate to heart with the services offered.
- Embrace and drive change to pursue growth and development
- Create fun and little weirdness for our customers
“Stay under the water, stay refreshed”
- SWOT analysis
Excellent staff with strong knowledge of our services
Good relationship with the customers
Excellent geographical location; outskirts of town
Our pool is identified as training ground for the national team
Successful marketing strategies
Understaffing on the executive management part
High rental costs
Lack of enough pools to accommodate the growing demand
Sharjah, Fujairah, and Rak are new holiday destination towns
2022 world cup that is set to be held in Qatar; many visitors will prefer U.A.E for accommodation
Launch of annual membership
Similar services offered by competitors
Competitors have new marketing strategies
Economic crisis: people are spending less
- External mechanism
- Market for corporate control
The main objective of Aqua Elite Junior is to expand from the already existing market and increase its market share. The target markets include Sharjah, Fujairah, and Rak which are cities in the U.A.E. Market for corporate control is an important external tool that will aid in achieving these objectives. This involves purchasing an underperforming firm in the aforementioned towns. These firms must be operating in the same industry that is hospitality which includes offering swimming services. This will be an important measure as merging with such a firm and improving its strategies will improve Aqua’s competitiveness.
- External parties
In management, it is always good to allow experts perform some tasks that will improve the competitiveness of the organization. In this regard, technology is an integral tool that stewards organization operations. Information technology aids in marketing, providing up-to-date information, conducting researches, and giving the organization an online presence (Chong, 2007). In light of this, Aqua requires external information technology firm that will aid in marketing and ensuring flow of information around the organization. This implies that the firm can outsource companies that offer important services to the organization. For instance, the firm will require transport services to the new branches as some customers may wish to experience the new branches. Additionally, some members of staff will need to be ferried to the new branches to offer some services.
In summary, corporate strategy is an inevitable tool for the Aqua Elite Juniors especially when it is in the verge of opening new branches. Introducing the concept of governance strategy will require an empirical method capable of treating the set of corporate governance mechanisms as belonging to a concerted action. The outlined functions will need an experiential report that will give insightful figures for the process. Corporate governance is intertwined with performance although the firm will have to endure imperfections before implementing it successfully (Akinpelu, 2011). Therefore, the above mentioned operations will guide Aqua Elite Juniors to higher heights.
Akinpelu, O. A. (2011). Corporate Governance Framework in Nigeria: An International Review. Bloomington, IN: iUniverse.
Chong, M. (2007). “The role of internal communication and training in infusing corporate values and delivering brand promise: Singapore Airlines’ experience.” Corporate Reputation Review 10.3: 201-212.
Harford, J., Sattar A. M., & William F. M. (2012). “Corporate governance and firm cash holdings in the US.” Corporate Governance.Springer Berlin Heidelberg, 2012.107-138.
Huse, M. B. (2007). Governance and Value Creation. London: Cambridge University Press.
Klapper, L. F., & Inessa L. (2004). “Corporate governance, investor protection, and performance in emerging markets.” Journal of corporate Finance 10.