Term Paper on "Google, Inc. Corporate Governance Structure"

Term Paper 15 pages (5634 words) Sources: 10 Style: MLA

[EXCERPT] . . . .

Google

Corporate governance comes in a variety of forms and may be adapted to the specific needs of the company under discussion. The model has changed in some cases for different reasons, and the rise of e-commerce and online business has necessitated some of that change. One of the most successful online entities created since the rise of the Internet is the online search engine Google, a company that has a unique style of corporate governance, just as it has developed a strikingly different and varying business model for its search engine, its core business, and also for the many spin-offs it has instituted around that business. Google was never the only search engine offered on the Internet, but it soon would become the most popular and the most effective, so much so that the name of the company itself would become a noun used by millions of people for the very act of looking something up on the Internet. Like many computer technology companies, Google from the first had a certain iconoclastic sense of its mission, of its relationship top its users, of its offerings, and of its form of governance. The business world at first rejected out of hand the looser and more tolerant nature of corporate governance on the Web, though success by a number of companies using this approach has caused a rethinking to a great degree. Google.com stands today as a model of a certain type of online business model and has also shown the ability to incorporate much of what others do into its own business plan. The rise of online book sites caused Google to set out to offer its own version through Google Books, trying to outdo other such sites by offering search options and full text as much as possible. The company

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saw maps distributed by companies like Map Quest and added its own, developing a more extensive form of mapping that includes satellite photos of the territory offered in each map and other features as well. Google has also found ways to offer its own versions of music downloading, online television, selling sites to compete with Amazon.com and the like, and many more services bettering services offered by other companies. In some cases Google has expanded by purchasing other sites and adopting these to its business plan, while in other cases it has simply created a more competitive version and introduced that to the public. Throughout, the company has maintained its unique brand of corporate governance, less centralized and less rigid than the norm, a model being emulated by other businesses online today.

Corporate Governance

Corporate governance is usually described as referring to both the structure and the relationships determining corporate direction and performance. The Board of Directors is considered central to corporate governance and is the body often seen as representing corporate governance. The relationship of the Board to the company's shareholders and management is seen as vital, and others who may affect corporate governance include employees, customers, vendors, and creditors. The framework for corporate governance includes elements that are legal, regulatory, institutional, and ethical, linked to the prevailing environment of the business community.

Corporate governance has been given more attention in recent years first because of failures of corporate governance, as in the Enron scandal and other such scandals, and second because of the perception that corporate governance is key to success in the developing global marketplace. Some observers see corporate governance in the developing global economy as offering a new locus of power and control in the capital market itself, reducing the sway of nations but increasing the potential for nations to be obstructive to a degree as they may attempt to influence the flow of capital and other issues best left to, and now necessarily left to, the markets themselves. The role now seen for nations is to react and to do so in a way that is beneficial to the power of the market itself. Often, governments react by trying to assert their own power, even at the expense of the economy because they want to have control. They will not have control in the developing global economy, however, and governments should get used to this and let the market take its own course.

This is likely to change the way markets are governed and the roles of governments and corporate governance alike. Corporate governance will seek to maximize b3enefits by enhancing this flow of both capital and production methods and by accelerating all of these processes. The system developing is an open, global system, a move away from the closed, national system, and this is thought to change who bears the risk. This requires that corporate governance realize this fact and take it into account, being weaned way from the protections afforded by the closed national system they are accustomed to and toward the open, global system that is coming no matter what they might think about it. This opens many new possibilities because there is no state mechanism standing between the participant and the global market, but it also creates challenges because the participant must think through all the possibilities and will not have the security net of the past or the ability to blame a different entity for what happens.

Such an image of the global economy fits well with an Internet-based business like Google. The Internet is a truly global marketplace, able to operate around the world without the need for a costly infrastructure for each country, with no need for separate stores in various locations, with many communications issues part of the very existence of a company online, and with a truly global reach for the business.

Google

The development of Google in the form it now has and the way its corporate governance.

A developed can be traced to the history of the company and to decisions made at various junctures by its founders. The company was started in 1995 by Stanford University computer science graduate students Larry Page and Sergey Brin as they set out to find a unique approach to solving one of computing's greatest challenges, retrieving relevant information from a massive set of data. By 1996, the two had created a search engine called BackRub, named for its ability to analyze the "back links" that point to a given Web site. They worked to perfect the technology further so that in 1998,-Page and Brin built their own computer housing in Larry's dorm room, a business office in Sergey's room, and Google had a new home. They then set out to find potential partners who might want to license their search technology, which worked better than any available at the time. One of those they met was David Filo, the founder of Yahoo!, and he encouraged them to develop the service themselves by starting a search engine company. They devised the name "Google" from the word "googol," a mathematical term for the number represented by 1 followed by 100 zeros. A googol, or google, thus represented a very large number, reflecting the company's mission to organize the huge and seemingly infinite amount of information available on the World Wide Web ("Google, Inc." paras. 1-4).

When they were unable to secure the financial support of the major portal players of the day, the cofounders decided go their own way and wrote a business plan and then searched for an investor, approaching several, including Andy Bechtolsheim, founder of Sun Microsystems, who wrote a check to Google Inc. For $100,000. The company was incorporated in 1998 and soon opened new headquarters in a garage in Menlo Park, California. By then, Google.com was answering 10,000 search queries a day, and articles about the new Web site appeared. By December, PC Magazine would name Google to its list of Top 100 Web Sites and Search Engines for 1998. The numbed of queries pe day soon increased to 500,000, and the number of employees increased to eight. Google moved its offices to University Avenue in Palo Alto in 1999 and signed on with RedHat, its first commercial customer. By June of that year the company had secured $25 million in equity funding from two leading venture capital firms in Silicon Valley. Staff members from the two investors joined Google's board of directors, and new managers were attracted for various departments. The company soon outgrew its new headquarters and moved to the Googleplex in Mountain View, California ("Google, Inc." paras. 5-10).

The company continued to expand in various ways. Traffic reached over three million as AOL/Netscape selected Google as its Web search service, followed by the Italian portal Virgilio and the UK's leading online entertainment guide, Virgin Net. Over this time, the company culture developed and would inform its brand of corporate governance to this day.

The company nurtured an atmosphere of innovation and collegiality, bolstered by its corporate culture of exercise balls, lava lamps, workout rooms, grand pianos, and visiting dogs. The company continued to improve the search engine and attributed much of… READ MORE

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Quoted Instructions for "Google, Inc. Corporate Governance Structure" Assignment:

“

Paper on the evaluation of Google Inc.(Company) corporate governance structure based on the topics below:

So Google is the company used for the paper

1. What is Corporate Governance (January 7)

1) We will begin by first defining what is meant by corporate governance and who the parties are.

2) Next, we will review the Sarbanes Oxley Act of 2002 and how it might change the traditional view of corporate governance.

Here, the role of the Board will be discussed against the current business environment and potential for further regulation.

2. The Role of the Outside Counsel (January 14)

In this session, we will hear from a legal expert about the current and changing role of both internal and external counsel. We will address issues such as the responsibilities of counsel to address weaknesses in the process, why the Board of Directors may now need its own legal counsel, and what impact recently enacted legislation might have on shareholder suits.

3. Further defining the Role of the CEO and Board of Directors (January 18 - Friday)

We will discuss how to balance the company*****s and the Board*****s responsibilities to Labor, Management, Itself, The Community, and the Government (Local, State, and Federal). Criteria for Board membership, internal vs. external membership, balance, etc. will be examined in depth. Discussion will focus on the role of the Board*****s Audit, Compensation, and Nominating Committees.

4. The Use of Financial Statements to Identify *****Red Flags***** (January 28)

In this session, we will discuss the issues that have led to failures in the financial accounting and reporting processes of publicly traded firms. We will test our knowledge of our abilities to recognize the warning signs before they manifest into a required restatement by reviewing a filing by a public company.

5. Compensation and the Role of the Board (February 4)

In this session, we will hear from an expert in compensation on how compensation is set and other issues related to compensation. We will also discuss the form and amount of Board member compensation.

6. The Production of Financial Information (February 11)

Issues addressed include who is responsible for responsible for the financial statements, the role of the board in determining accuracy of the data, the documentation of a company*****s internal corporate policies, and how the changes in Sarbanes Oxley will impact the timeliness and transparency of financial statements. Finally, we will hear from an expert on the impact of Sarbanes Oxley on internal control issues.

7. Monitoring Internal Control and Ethics Within the Corporation (February 18)

In this session, we will examine the responsibilities and constraints placed by Sarbanes Oxley on the management of a corporation to monitor their internal control system and the implementation and operation of the code of ethics for their senior financial officers. We will hear from a senior member of management of a publicly traded corporation who has primary responsibilities for these activities.

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