McBride Financial Problem Solution

Essay by tbaby103694University, Master'sA-, April 2010

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Problem Solution: McBride Financial Services � PAGE \* MERGEFORMAT �1�


Problem Solution: McBride Financial Services

Terri Gilbert

University of Phoenix


Problem Solution: McBride Financial Services

The mismanagement and fraud created by corporations like Enron, WorldCom and Tyco forced Congress to enact the Sarbanes-Oxley Act (SOX). The law requires corporate governance includes financial reporting and disclosure. McBride Financial Services (McBride) has become a publicly trading company that needs to develop good corporate governance to meet the expectation of the investors. McBride needs solutions to resolve issues of noncompliance that could hurt the reputation of the company. This paper illustrates the situation and opportunities; stakeholders interest; values and ethical dilemmas; problem statement; end-stage vision; alternative solutions; analysis of alternative solutions; risk and mitigation; optimal solution; and evaluation of the results to create best practices in corporate governance.

Situation Analysis

Issue and Opportunity Identification

McBride Financial Services (McBride) is a regional mortgage lender specializing in conventional, FHA and VA loans to purchase or refinance homes (University of Phoenix, 2010).

The start-up company has become a publicly trading entity with Beltway Investments (Beltway) as the majority investor. Beltway wants McBride to use best practices in corporate governance and plans to rely on Institutional Shareholders Services recommendations about the company's business practices (University of Phoenix, 2010).

Hugh McBride, founder and CEO, does not want interference from the board of directors or investors and plans to run the company his way. McBride has the opportunity to create charters and bylaws to place checks and balances by shifting power from the CEO to an independent board of directors. Another issue is the CEO has no knowledge about corporate governance and regulatory compliance. Hugh McBride wants the controller, Paul Thomas, to handle issues regarding corporate governance, Sarbanes-Oxley Act (SOX), and...