Corporate Governance Activities

Question: Describe about the national gas company of trinidad and tobago limited? Answer: Executive Summary The goal which is common to many organizations is having the most effective framework of corporate governance in the company. To safeguard the integrity in a corporate reporting it is essential that a listed company should have a rigorous and a formal process that will independently safeguard and verify the integrity of the reporting of the corporate activities. The report is a brief discussion of the corporate governance of the company NGC (The National Gas Company of Trinidad and Tobago Limited) which is in the business of extraction of natural gas. The company seeks to provide the people of the company as well as the people of the community to upgrade their living standards. The company maintains the rules and regulations of the government as well as the policies of the company in order to run their business properly. They aim to safeguard their governance by maintaining the standards of the society and the environment. Introduction What is corporate governance? Corporate governance is the framework of the rules, system, relationship as well as processes within the organization. It is by this that the company exercises control within the company. It is also a guiding mechanism, by which the company and the persons in control of the company are held responsible for the wrong conduct or for misconducting the rules of the company. It is also seen that good corporate governance can promote the investors to have confidence to invest in the business (Corporate Governance Principles and Recommendations, 2015). The governance attributes of the organization are influenced by various factors which are internal as well external to the company. The internal factors are organizational policies, constitution of the organization, and the external factors are the community expectations, laws, rules and regulations of the country of the area in which the company is operating. The goal which is common to many organizations is having the most effective framework of corporate governance in the company. This is done to ensure that the meet the individual needs and circumstances of the company (Energy Chamber of Trinidad and Tobago, 2013). These factors will ultimately enhance the performance of the company as well as helps in conforming to the various requirements of the company. The following guidelines should be followed in order to maintain good corporate governance To lay a solid foundation for the management- a listed company should disclose and establish the rules and regulations, roles and responsibilities of the board members and the management as well as the way the performance is evaluated and monitored. To act responsibly and ethically- a listed company should act legally, responsibly and ethically so that they do not hamper the morale of the people (Corporate Governance Principles and Recommendations with 2010 Amendments, 2015). To recognize and manage the risk- a listed company should try to combat the risks associated with the business after recognizing the risk. This is done on a regular basis so as to increase the effectiveness of the business. The security holders rights are to be respect- a listed company should show respect to the rights and privileges of the security holders. They should be provided adequate information as well as facilities so that they could exercise the rights properly. To safeguard the integrity in a corporate reporting- a listed company should have a rigorous and a formal process that will independently safeguard and verify the integrity of the reporting of the corporate activities. The board should be structured so as to add value- a listed company must have a board which is appropriate in composition, skills, size and commitment so as to enable the company carry out it s activities effectively. The company NGC (The National Gas Company of Trinidad and Tobago Limited) The company NGC is a very important player in the development of the natural gas industry of the country. The company was established in August of 1975 (Company Profile, 2015). The company has become an investment company which has an asset of over US $ 7 billion. It is one of the largest companies of the Caribbean as well as the Latin American part if measured by its assets. The company was consistently profitable from the time of its inception, and has significantly contributed to the dividends and taxes to the states treasury. The financial strength of the company is the source of the strength of the company (BNamericas, 2015). The company even funds the international and local money markets. Due to these activities the company is a premiere location for the investments by the businesses who are interested in the oil and gas industry. What the company does The company has established a strategic position both upstream as well as downstream. The upstream relation is with the producers of the natural gas and the downstream relation is with the consumers of the gas. In 2013, the company has made a commendable advancement the downstream sector (Company Profile, 2015). The company has acquired an additional 39% percent share of Phoenix Park Gas Processors Limited (PPGPL). The acquisition of the company made the equity interest of the company to 90%. Governance protocols and practices The Board of Directors The Government of Trinidad and Tobago has appointed the following people to be the Board of Directors of NGC (Board of Directors, 2015): Roop Chan Chadeesingh---- Chairman Gordon Ramjattan ----Deputy Chairman Haseena Ali---- Director Mulchan Lewis ---- Director Khalid Hassanali ---- Director Utam Maharaj---- Director Orville Moore ---- Director Clyde Ramkhalawan---- Director The executive management of the company consists of the following people: Indar Maharaj ---- NGCs President. Olave Maria Thorne ---- NGCs VP, (Legal and Corporate) Tickaram Roopchandsingh ---- Vice President, (Gas Transmission and Distribution) Anand Ragbir ---- Vice President, (Finance and Information Management Group) Patrick Bynoe ----Vice President, (Technical Services (Ag.)) Corporate social investment -- CSI It is defined as a voluntary activity which is beyond the legal and commercial activities of the business. It contributes to the environmental, economic and social activities of the community in which the company operates (NGC, 2015). The company tries to improve the quality of life of the people as also the underserved people of the community. The CSI initiatives of the company include a wide range of activities including development of the infrastructure of the company so as to provide training programmes to the people of the society. The company aims to provide economic development to the society as well as development of the youth of the area through sports and arts. The CSI activities of the company are guided by three activities which include the civic life, empowerment and sports development of the area. High Ethical Standards of the company The company prides itself in possessing an ethical culture, which is strong. They continuously strives itself in providing a world class functioning of the business. The company has achieved all these by its ethical and the professional behaviours in their business practices. The company has written guidelines as well as company standards on various ethical issues, like for example, the Transparency and fair trading procurement, gifts, substance abuse etc. The company continuously renews the business processes so as to improve the transparency, accountability and the integrity of the business. The ethical framework of the company is kept alive by its commitment to the core values of the business through the revised policies, strategic plans and the guidelines (Beauchamp Bowie, 1993). Fair trading and transparency in the business The company has several tender rules to administer the functioning of the business. These rules try to maintain the confidentiality of the information of the business. These rules aim to ensure a fair treatment of all the people who seeks to supply the company with services and goods. The strong leadership of the company and the knowledgeable, independent and strong internal audit staff; tenders the procedures and rules to meet the standards internationally (Bessembinder, Maxwell Venkataraman, n.d.). Conflict of interest This crisis appears when the employees of the company are in a position to due to the type of responsibilities of the job to enhance the financial interest of a person. This happens when the person holds a financial or investment interest with any customer, competitor, or customer of the company (NGC, 2015). The employees needs to see that if their interest clashes with the interest of the company then, they must remove themselves from such indirect or direct involvement with the matter. Threat to the employees The company sees that the unsuitable use as well as the abuse of the psychoactive drugs can seriously hamper the performance of the employees (NGC, 2015). It can also cause risks and liability which are unacceptable. It also lowers the confidence of the stakeholders of the business. Thus the company strictly follows a zero tolerance policies if any illegal usage of the prohibited materials occurs. The company even prevents all these by educating the employees and the people, detects and tests the methods of operation, they try rehabilitation of the people as well as corrective and disciplinary actions are taken. Gifts The company strictly debars the employees from receiving or accepting any gifts or personal favors and even preferences which will influence the decisions regarding the business. The company debars any such activities if it is found that it is favoring the interest of any person with whom the company has a business association. The employees can acknowledge the gifts and the benefits if it is a social customary or obligation. The gift needs to be reasonable, low cost in nature which cannot exceed $2000 from a particular source. Criticism of the company a breach of the policy of the company According to a press release- It was found in one of the inspections on maintenance that an underground leak was detected in the underground pipes a 56 inch cross in land pipeline of the company which was used for the transportation of the natural gases from TGU and Atlantic. The company is in the process of taking out the pipeline and repairs its pipelines. The company claims that the leakage will pose no serious danger to the neighboring communities and they claimed that the situation is under control (PRESS RELEASE, 2015). The gas supply of the company to TGU and Atlantic will be discontinued unless the pipes are repaired. The natural gas and the liquids of the natural gases are dangerous and are hazardous to the life of the people and the environment. The scent of rotten eggs comes out when there is a leakage in the pipeline. Moreover there is a hissing sound that can be heard from the leakage. There are some other visible implications like the burning of the vegetables on the ground or bubbles are seen in the water. It is seen that the company is not able to safeguard the welfare of the people. The trade practices of the company have more often put the people in danger due to the hazardous effects that the oil spills cause. These are some of the issues which create a hazard to the life of the people and the surrounding area. The people are required to follow certain regulations during the times of the emergencies. The safety measures that are issued for the people of the surrounding area are: The people are advised not to leave the area on foot or move about The cell phones or the landlines are not to be used unless the area is cleared and habitable People should not use match sticks or any substances which would cause sparks in the area as it can catch fire. The people should not use vehicles as well as not smoke in the area. Lastly they should not turn on or off any lights and contact a emergency hotline in case of need. Measures taken by the company to protect the environment Natural gas is considered to be the cleanest and the safest fossil fuel that can be burnt in the open atmosphere. It aims to reduce the commercial, transportation and industrial pollution. The gas gives out 30% less carbon dioxide than the crude oils. If the natural gases are used widely in the society, then there will be an increase in the efficiency of the nation and will reduce the impact on the environment (Tokyo-gas.co.jp, 2015). NGC always maintains a right standard for the people and the country at large. They provide safe distribution and transmission of natural gas. The pipelines of the company are installed, maintained, operated and also repaired at a regular basis according to the international standards. The pipelines of the company are located in places which are marked as Rights of Way and are bordered by yellow posts. These posts are laid so that there are no encroachments due to agriculture or road constructions. These are monitored on a regular basis so as to detect any leaks or cases of soil erosions (Ngcenergy.com, 2015). The company has a Oil Spill Contingency Plan to control the hydro carbon release in the atmosphere in case of oil spills. There are often oil spills in the area of south-east coast marine, thus the area is protected by the Contingency plans. NGC has waste management programmes so as to reduce, prevent, recover and recycle the wastes. Moreover pre-treatment as well as disposals of the wastes also takes place. The company regularly removes the wastes from the pipelines after a particular project. An example of this can be seen from the fact that waste oils were collected from the offshore platforms and were used for the deep well injections It is known to everyone that the natural gases are colorless as well as odorless thus cannot be detected in the atmosphere if there is any leakage. Thus the company has taken a step to combat that problem. They have started to use Mercaptan, a chemical which is harmless and smells like rotten eggs thus the people are alerted if there is any leakage of the gas. Conclusion and recommendations Thus from the following information of the company it can be concluded that the company looks after its corporate governance very well so as to abide by the rules and regulations of the company as well as the country (NGC- ANNUAL REPORT 2013, 2014). Though the company often faces troubles from the neighboring areas for their businesses but it has tried to maintain the standards of the life of the people. the company has initiated several programmes so that it can safeguard the rights of the employees of the organization as well as the people of the community (REPUBLIC OF TRINIDAD AND TOBAGO, 2015). Through the CSI the company has tried to develop the lives of the people, and by funding in the countrys capitals the company has raised the standards of the people to a great extent. Moreover the company was successful in creating a sustainable environment by abiding to the laws of the land as well as the company. References Beauchamp, T., Bowie, N. (1993).Ethical theory and business. Englewood Cliffs, NJ: Prentice Hall. Bessembinder, H., Maxwell, W., Venkataraman, K. Market Transparency and Institutional Trading Costs.SSRN Journal. doi:10.2139/ssrn.644624 BNamericas,. (2015).NGC (The National Gas Company of Trinidad and Tobago Ltd.) | Trinidad Tobago | Company Information Profile | Contacts - BNamericas. Retrieved 12 March 2015, from https://www.bnamericas.com/company-profile/en/the-national-gas-company-of-trinidad-and-tobago-ltd-ngc Board of Directors. (2015) (1st ed.). Retrieved from https://ngc.co.tt/about/governance/board-of-directors/ Company Profile. (2015) (1st ed.). Retrieved from https://ngc.co.tt/about/ Corporate Governance Principles and Recommendations. (2015) (3rd ed.). Retrieved from https://www.asx.com.au/documents/asx-compliance/cgc-principles-and-recommendations-3rd-edn.pdf Corporate Governance Principles and Recommendations with 2010 Amendments. (2015) (2nd ed.). Retrieved from https://www.asx.com.au/documents/asx-compliance/cg_principles_recommendations_with_2010_amendments.pdf Energy Chamber of Trinidad and Tobago. (2013) (1st ed.). Retrieved from https://www.energy.tt/downloads/CorpGov/EC01%20Legislative%20Guide.pdf Goldman, S. (2008).Temptations in the office. Westport, Conn.: Praeger. NGC- ANNUAL REPORT 2013. (2014) (1st ed.). Retrieved from https://ngc.co.tt/wp-content/uploads/pdf/annual-reports/2013_NGC_ANNUAL_REPORT.pdf NGC,. (2015).Corporate Social Investment. Retrieved 12 March 2015, from https://ngc.co.tt/corporate-social-investment/ NGC,. (2015).Governance. Retrieved 12 March 2015, from https://ngc.co.tt/about/governance/ Ngcenergy.com,. (2015).Safety. Retrieved 12 March 2015, from https://www.ngcenergy.com/malaysia/AboutUs/Safety.aspx PRESS RELEASE. (2015) (1st ed.). Retrieved from https://ngc.co.tt/wp-content/uploads/2014/11/ngc-press-release-56-inch-cross-island-pipeline-nov-26-2014.pdf REPUBLIC OF TRINIDAD AND TOBAGO. (2015) (1st ed.). Retrieved from https://www.clfhcuenquiry.org/10thStatements/Ewart%20Williams%20Witness%20Statement%20and%20Exhibits.pdf Tokyo-gas.co.jp,. (2015).TOKYO GAS : Corporate Social Responsibility / Measures Taken against Environmental Risks. Retrieved 12 March 2015, from https://www.tokyo-gas.co.jp/csr/report_e/5_environment/management3.html