Corporate Governance Issues in Tuskys - Case Study Analysis
Corporate governance issues at Tuskys, a Kenyan supermarket chain, led to financial problems in 2020. Lack of accountability, transparency, ethics violations, and conflicts of interest within the management contributed to the downfall of the company. These issues affected stakeholders, employees, and suppliers, emphasizing the importance of strong corporate governance practices in maintaining a company's sustainability and success.
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CORPORATE GOVERNANCE ETA A
Corporate governance is the system of rules, practices and processes by which a company is directed and controlled. Corporate governance is essentially about balancing the interests of the many stakeholders in a business, such as shareholders, senior executives, customers, suppliers, financiers, government and the community. It is mainly concerned with the structures and systems of control within which managers are held accountable to those with legitimate stake in the organization. Tuskys was a Kenyan supermarket chain and one of the largest chains in Kenya and Uganda. The company owned sixty supermarkets between Kenya and Uganda. They had over 6000 employees in Kenya alone. The company started experiencing financial issues in 2020 which was caused by poor corporate governance issues and managerial difficulties.
CORPORATE GOVERNANCE ISSUES IN TUSKYS 1. Accountability issues. Accountability is crucial in maintaining the profitability and operations of a company. Each and every division in the organisation should be accountable for their operations and it should be able to provide reports to other departments in the organisation. Tuskys failed to report some of their financial statements therefore, revenue and expenditure was not recorded and the lack of records caused the company to register losses affecting their overall income. 1. Transparency. This issue is caused by the failure of a company to report their profits and losses to the relevant authorities and the general public. Tuskys failed to adequately report their financial statements as allegations arose that the top tier management had a hand in the manipulation of these statements to provide a window for embezzlement and ways to personally benefit from the profits. The lack of transparency made the company have insufficient funds to pay their suppliers.
3. Ethics violations. The top tier management of Tuskys had a duty to protect and make decisions on behalf of the organisation. They failed to accommodate the best interests of the company and this led to its downfall. The lack of accountability in financial statements constituted the violation of conduct. 4. Conflicts of interest. The executives and management that was responsible for the financial downfall failed to meet the goals and objectives of the company. Shareholders of the company act in their own interest during the downfall and pulled out their financial resources making the company register further losses despite their current situation.
GROUP MEMBERS. 96494 Nyamai, Mercy Mwende 110505 Nzangi, Arafa Njeri 111572 Samoei, Mercy Chepkirui 110754 Njoroge, David Timothy 111910 Oburu, Joe Oluoch 111696 Onkwani, Emmanuel Nyangito 110402 Njuguna, Melanie Donata 073577 Ojwang Charles Tsombe
