Question

Try to establish whether the governance mechanisms that operate in best buy do a good job of aligning the interests of top managers with those of stockholders.

Answer 1

Governance mechanism presently adopted by Best Buy is to improve financial operation by cutting cost and top executive payment at the time of leaving Best Buy by top executives.Honesty and accountability is incorporated in the core mechanism of Best Buy to improve the corporate governance. These changes were adopted due to external pressure and a perception of not following standard coprorate practice by Best Buy.The stock holders through their representative i.e. Board of Director making governance mechanism so that the goal of the organization will be aligned with the interest of the top managers. Through honesty and accountability by the appropriate levels, Best Buy is executing a standard governance mechanism to succedd in its operation.