Apple Inc. Investment Analysis and RecommendationsApple Inc. is an American multinational company specializing in designing and producing mobile telecommunication devices that include iPhone, computer software and hardware, Apple TV, Apple Watch, iPod, and other electronic devices. Apple was incorporated and publicly registered in 1977. Headquartered in California, Apple is one of the most successful American companies in term of revenue with the annual revenue reaching $233.7 billion at the end of 2015 fiscal year. On February 2016, Apple recorded $521.3 billion worth of market capitalization. While Apple designs the bulk of their products in the United States, the company's manufacturing plants are located in China. Apple also operates in Europe, Japan, Canada, and Latin America. (Apple Inc. 2015).
Board of Directors
Apple Inc. Board of Directors is overseeing by the company CEO (Chief Executive Officer) and other competent senior management. The Board oversees the day-to-day operations of the company as well as assuring the shareholder's long-term interests. Moreover, Apple Inc. Boards take the proactive approach to set the ethical standards by maintaining high ethical approach and responsibility. Based on the information in the proxy statement, Apple Inc. Board of Directors consists of 8 members from the information in the 2015 annual report. (Apple, 2015). Annually, the shareholders elect the Board member and select leaders based on their competencies, attributes, and experiences. Thus, the Apple proxy states the biographic data experiences, and attribute of each member of the board. The proxy statement also provides information regarding the Board member selection process, the composition of committee and committee charter. (Apple Inc. 2015).
Monitoring of potential Apple's Board of Directors
Apple's Boards believes in using their current leadership to achieve the company objectives. The board also believes in enhancing the corporate governance by periodically reviewing the leadership structure to meet shareholders' interests. In arriving these obligations, Apple's Board composes of a group of leaders with a diverse background in finances, risk management, and senior leadership. However, Apple set up different committees to monitor the activities of the Board members. (Adjaoud, & Ben-Amar, 2010). The Audit and Finance Committee is responsible for monitoring and overseeing Apple's financial statements as well as other financial information. The committee also oversees that the company financial statements and reporting to comply with legal, ethical, and regulatory requirements. Moreover, the committee oversees the internal control systems and data security. (Mukherji, 2002).
On the other hand, the Compensation Committee is responsible for reviewing and approving Board's compensation and company's executive officers. The Compensation Committee is also responsible for administering equity compensation plan for the Board member and perform other duties as being set forth by the company charter. The Nominating and Corporate committee are also one of the Apple's committees responsible for implementing a periodic reporting on the matter responsible for selection, identification, and qualification of Board members. (Adjaoud, & Ben-Amar, 2010). The committee is also responsible for making recommendations for the selection of competent candidate to the Board. However, Governance committee advises and recommends critical matters to the board. They also recommend a modification of policies to Board as deemed appropriate and assigned by laws. (Kotler, & Keller, 2012).
Strengths and Weaknesses Apple's Board Structure
One of the strengths of the Apple's Board lies in the leadership skills of the board's member. For example, Tim Cook, who is the (CEO Chief Executive Officer) has an accumulation of experience in strategic global operations. Apart from Cook advanced educational background, he has also accumulated a wealth of experience in strategic supply chain, and product inventory. Other members of the Board also have working experiences in their related positions. For example, Luca Maestri, who is Apple Chief Financial Officer has more than 25 years of working experience as a Finance and Corporate Controller. Moreover, he has been a been a global leader building finance teams for different global companies. The working experience and advanced educational qualifications of the Board's members have assisted Apple to record superior performances year by year.
Another strength of the board is the performances and composition of the audit committee. The audit committee assists the board to implement the ethical financial controls that assist the company to abide by the GAAP financial requirements. The audit committee also implements the risk managements process at the enterprises level. Another strength of the Board...
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