The actions of management in corporations need to be transparent to its stakeholders. In an initial post of 300 words or less, what does this mean and what are the benefits of management being transparent? What would be an example of this in business today? How does Proverbs 21:26 guide us in this endeavor?
Support your post with two scholarly journal references from outside sources and/or Regent University database.
Reply to two, in 125 words or less, supporting or challenging their beliefs.
Above is our main post that we had to do. Below is one of my fellow students post that I need to respond to.
As a financial manager of a company, the goal should be to increase the stockholder’s wealth; tied to that is the importance of transparency. High-quality financial statements, rather than attempting to hide information from the stockholders, are transparent to their supporter and investors by releasing and making easily-accessible financial statements. Not only is this beneficial in informing the investors, but it simultaneously benefits the company as well. When the investors feel more confident in the company (due to higher transparency) the company’s market value will increase as investor’s confidence is boosted. Also, by obscuring debt, and company disservices its stock holders by lowering the estimated risk exposure to bankruptcy. Therefore, possible investors cannot accurately make a solid investment judgment in the company. By choosing to be up front and open about the successes or struggle of a company, that company incites confidence into their own market capital, thus purporting a higher price on the exchange. An example of excellent disclosure to stockholders is Disney (DISN). They give out comprehensive quarterly and annual reports open, not just to investors, but to the public. The CEO personally addresses the stockholder and gives them a run down on the major company events the past year. Also, the information is easily readable and understandable for investors. Detailed explanations are included when needed as well.
Proverbs 21:26 states that the sluggard’s laziness is his downfall, but in contrast the righteous give without reserve. How does this interact with investors and stockholders? The aspect of honesty and truthfulness, the lazy companies are not willing to organize their information (or in some instances willing hide their information) to the investors. However, Christian companies or companies should always be willing to give information and keep open books. This policy of openness also dissuades dishonestly internal and protects against fraud.
Block, Hirt, and Danielson. (2016). Foundations of Financial Management. Print.
Fung, B. (2014). The Demand and Need for Transparency and Disclosure in Corporate Governance. Universal Journal of Management. Web.