CORPORATE GOVERNANCE OF TANGERINE TECH CO
WEAKNESSES
TANGERINE’S BOARD IS COMPRISED OF
SIX EXECUTIVE DIRECTORS, A NON-
EXECUTIVE CHAIRMAN AND THREE
OTHER NON-EXECUTIVE DIRECTORS
(NEDS).
THE CHAIRMAN AND ONE OF THE NEDS
ARE FORMER EXECUTIVE DIRECTORS OF
TANGERINE AND ON REACHING
RETIREMENT AGE WERE ASKED TO TAKE
ON NON-EXECUTIVE ROLES.
THE COMPANY HAS ESTABLISHED AN
AUDIT COMMITTEE, AND ALL NEDS ARE
MEMBERS INCLUDING THE CHAIRMAN
WHO CHAIRS THE COMMITTEE.
ALL FOUR MEMBERS OF THE AUDIT
COMMITTEE WERE PREVIOUSLY
INVOLVED IN SALES OR PRODUCTION
RELATED ROLES.
ALL OF THE DIRECTORS HAVE
BEEN MEMBERS OF THE
BOARD FOR AT LEAST FOUR
YEARS.
AS THE CHAIRMAN DOES NOT HAVE AN
EXECUTIVE ROLE, HE HAS SOLE
RESPONSIBILITY FOR LIAISING WITH THE
SHAREHOLDERS AND ANSWERING ANY OF
THEIR QUESTIONS.
THE COMPANY HAS NOT
ESTABLISHED AN INTERNAL AUDIT
FUNCTION TO MONITOR INTERNAL
CONTROLS.
EXPLANATIONS RECOMMENDATIONS
FROM THREE OUT OF NINE DIRECTORS ARE
NEDS, SO IT IS ONLY FULFILL 33% OF THE
MINIMUM NED THAN IT SHOULD BE. THE
IDEAL AMOUNT ACCORDING TO UK
CORPORATE GOVERNANCE IS AT LEAST 50%
OF NON-EXECUTIVE DIRECTOR.
TO BE A NON-EXECUTIVE DIRECTOR, ALL THE
STRUCTURAL POSITIONS THAT HAVE RELATED TO
THECOMPANY MUST HAVE BEEN TAKEN OFF FOR ABOUT
FIVE YEARS. ALONG THESE YEARS THERE IS NO
RESPONSIBILITY MAY TAKEN. THUS,IT CAN CAUSE THE
OBJECTIVITY TO BE QUESTIONABLE AND CAN NOT BE
ASSESSED IF IT IS NOT FULFILL THE REQUIREMENT.
THE AUDIT COMMITTEE MAY NOT ALSO BE THE
CHAIRMAN. IT HAS TO BE A DIFFERENT
PERSON IN EACH POSITION. IT CAN CAUSE
THEIR WORKINGNOT INDEPENDENT IF THE
MEMBERS ARE THE SAME.
EVENTHOUGH THE COMPANY HAS THE FOUR AUDIT
COMMITTEE THAT HAS NOT TAKEN THE
RESPONSIBILITY IN THE COMPANY FOR FIVE YEARS.
BUT BEFORE BEING THE AUDIT COMMITTEE
MEMBERS, ALL OF THEM INVOLVED IN PRODUCTION
AND SALES. IDEALLY, ONE OF THEM SHOULD HAVE
AN EXPERIENCE IN FINANCE
THERE MIGHT BE SOMETHING WRONG WITH THE
NOMINATION/REGENERATION OF THE BOARD BECAUSE
THERE IS NO RE ELECTION. THE MEMBERS STILL THE
SAME IN FOUR YEARS. THUS, THIS TYPE OF
MECHANISM MAY NOT HAPPEN. IDEALLY, THERE
SHOULD BE RE-ELECTION GRADUALLY FOT AT LEAST
ONE YEAR.
EVENTHOUGH HE IS A CHAIRMAN, IT DOES
NOT MEAN THAT HE COVERS ALL THE
RESPONSIBILITIES. ALL THE MEMBERS
SHOULD ALSO TAKE THOSE
RESPONSIBIITIES.
TO MONITOR INTERNAL CONTROL BY
ESTABLISHING AN INTERNAL AUDIT IS NOT
NECESSITY BECAUSE IT IS REALLY COSTLY AND
THE NEED IS ACCORDING TO COMPLEXITY
SYSTEM OF THE COMPANY. BUT, THE COMPANY
SHOULD CONSIDER ABOUT IT.
THE COMPANY MUST HAVE 50% OF
NEDS. TO DO SO, THE COMPANY
HAS TO RECRUIT 2 MORE
ADDITIONAL FOR NEDS.
THE COMPANY SHOULD ASSIGN NON-
EXECUTIVE DIRECTORS TO TAKE NON-
EXECUTIVE ROLES RATHER THAN
EXECUTIVE DIRECTORS.
CHAIRMAN MAY NOT BE A MEMBER OF
AUDIT COMMITTEE. THEREFORE, THE
CHAIRMAN MUST RECRUIT ONE NON-
EXECUTIVE DIRECTOR TO BE A MEMBER
OF COMPANY’S AUDIT COMMITTEE.
THE COMPANY HAS TO REQRUIT
NON-EXECUTIVE DIRECTOR AND
ASSIGN THE MEMBER OF AUDIT
COMMITTEE WHO HAS THE
FINANCIAL EXPERIENCE.
MEMBERS OF BOARD HAVE BEEN THE
SAME WITHIN FOUR YEARS, THEREFORE
THE COMPANY HAVE TO PERFORM RE-
ELECTION FOR THE DIRECTORS.
ALL OF THE MEMBERS MUST BE
RESPONSIBLE TOO. THUS, THEY HAVE
TO ATTEND IN AGM, DISCUSS, AND
ANSWERING THE QUESTIONS OF THE
SHAREHOLDER.
THE COMPANY SHOULD CONSIDER
THE NEED FOR INTERNAL AUDIT BY
COMPARING THE COSTS AND
BENEFITS.