General Motors Assignment

GROUP MEMBERS
Sharjeel Sajid SP20-BAF-086

Hammad Alam SP20-BAF-030
Zuhaib Khan SP20-BAF-101
Abbas Ali SP20-BAF-001
SUBJECT: CORPORATE GOVERNANCE
SUBMITTED TO: DR. SHAGUFTA PARVEEN
DATE: 22 MAY 2023

Discuss the possible corporate governance issues relating to GM’s Board of
Directors and how it could have contributed to GM’s problems.
General Motors (GM) has faced significant corporate governance issues in the past, and these
problems have played a role in the company's challenges. Some of the key governance issues relating
to GM's Board of Directors include:
1. Lack of Independent Directors:
One issue was the lack of independent directors on GM's Board.

Independent directors are crucial for effective corporate governance as they provide objective
judgment and oversight. In the past, GM had several directors with close ties to the company,
including former executives and representatives from major shareholders. This lack of independence
may have contributed to a lack of critical oversight and accountability.
2. Inadequate Risk Management:
Another governance issue was the failure to effectively manage

risks. The Board's role is to ensure that appropriate risk management systems are in place, but in the
case of GM, there were failures in identifying and addressing key risks. For example, the ignition
switch defect that led to the recall of millions of vehicles went unnoticed for years. The Board's
failure to identify and respond to such risks indicates a breakdown in risk management processes.
3. Inadequate Oversight of Management:
Effective corporate governance requires the Board to

provide oversight of management's actions and decisions. In GM's case, there were instances where
the Board failed to exercise sufficient oversight. For example, the ignition switch defect was known
internally for years before being made public. The Board's failure to question and address this issue
suggests a lack of effective oversight and accountability mechanisms.
4. Lack of Diversity:
Another governance issue was the lack of diversity on GM's Board. Diversity,
including gender, racial, and experiential diversity, brings different perspectives and can lead to
better decision-making. GM's Board had a historically low representation of women and minority
directors, which may have contributed to a lack of diverse viewpoints and potentially hindered
effective governance.
These corporate governance issues likely contributed to GM's problems in several ways. The lack of
independent directors may have resulted in a lack of objective decision-making and oversight,
potentially allowing management to make poor decisions without adequate challenge. Inadequate
risk management processes could have led to a failure to identify and address critical risks, such as
the ignition switch defect, in a timely manner. The lack of effective oversight by the Board may have
allowed systemic issues to go unaddressed, leading to a decline in product quality and customer
satisfaction.
Overall, addressing these governance issues is crucial for GM to enhance transparency,

accountability, and risk management, and to ensure that the Board plays a more active and effective
role in overseeing the company's operations and strategic decisions.
To what extent should the Board of Directors be held responsible for the
safety issues? Explain
While the Board may not have directly caused the safety issues, they are responsible for establishing
a culture of safety, ensuring effective risk management, and providing proper oversight of
management's actions.
The Board should be held responsible for any failures in fulfilling these responsibilities, such as a lack
of effective monitoring, failure to address known safety concerns, or inadequate risk management
systems. However, it's important to note that the Board's responsibility should not absolve other key
stakeholders, such as management, regulators, and even the company's culture, which may have also
contributed to the safety issues.
In conclusion, the Board of Directors should be held accountable for the safety issues at GM to the
extent that they failed to fulfil their responsibilities of oversight, risk management, and
accountability. While they may not be directly responsible for the issues themselves, their actions
and oversight failures played a significant role in allowing the safety problems to persist.

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GROUP MEMBERS

Sharjeel Sajid SP20-BAF-086

SUBJECT: CORPORATE GOVERNANCE

SUBMITTED TO: DR. SHAGUFTA PARVEEN

DATE: 22 MAY 2023

1. Lack of Independent Directors:

One issue was the lack of independent directors on GM's Board.

2. Inadequate Risk Management:

Another governance issue was the failure to effectively manage

3. Inadequate Oversight of Management:

Effective corporate governance requires the Board to

Overall, addressing these governance issues is crucial for GM to enhance transparency,

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