Microsoft Corporation Governance Analysis

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Microsoft Corporation Governance Analysis

Background to the Study

Organization governance is instrumental because determines the way in which the organization is managed and directed. Governance influences the way in which the organization objectives are set and attained, spells out procedure and rules for coming up with organizational decisions, and establishes means by which the organization optimizes and monitors performance, including the way in which risk is assessed and monitored. For this reason, the following assessment looks at the governance practices, structure, and principles of Microsoft Company.  Microsoft Corporation has grown to be a leading manufacturer, developer, licenser, and seller of consumer electronics, computer software and computer services targeting the world market since its establishment in 1975 (Hulten, 2010).

Governance’s Structure and Management of Microsoft

Microsoft Corporation is led by an eleven member’s board of directors. The board of directors is chaired by Mr. John Thompson, who is the current CEO of Virtual Instruments and have served as the CEO of Symanter Corp. He has also held various senior leadership position in companies and government commissions such as IBM and Financial Crisis Inquiry Commission. This means that the chairman has the required experience, education, and knowledge to lead the board of the company. Other board members have held various senior positions in reputable public and private companies, government agencies and multinational corporations (Microsoft Corporation, 2015c). All the members nominated and elected for the board of directors’ position in this company possess experience, qualifications, attributes, skills and diversity to effectively provide oversight, monitor performance, and advise the company’s management on the long-term strategy.

The board of director is made up of five standing committees. This is in line with quality corporate governance. The five committees are compensation, audit, governance and nominating, antitrust compliance, and finance committees. Audit committee is made up of three members, compensation four members, finance two members, governance and nominating three members, and antitrust and compliance committee is made up of three members. All the committees are comprised of individuals who are highly experienced and versed with knowledge concerning their respective areas (Microsoft Corporation, 2015c). However, the finance committee is under staffed with only two members despite having heavy responsibilities that include formulating and overseeing the implementation of dividend and cash management, tax, insurance, proposed merger and capital policies. In overall, the structure and composition of the board of directors committees ensure that each committee can be able to handle all the responsibilities that are bestowed upon it.

Microsoft executive management is made up of twelve members. The company chief executive officer, Satya Nadella, joined Microsoft Company in 1992 before appointment to CEO position in 2014 (Microsoft Corporation, 2015d). Nadella has led various major projects of the company that includes cloud computing project and development of Microsoft cloud (which is largest in the world). Previously had held various executive……………………..