Corporate Governance – A case in the Video Games Industry

Below is a piece of coursework that I produced for my final year degree program.  The module is on Corporate Governance and for this piece of coursework I had to find a case within an industry and company, apply corporate governance models and contrast with any other examples.  All this work is work of my own, if you come across this in the future I would advise you to use this in a responsible manner, reference and credit where due as well as using this as a guide for source material.

If you would like to download a PDF of this, you can do so here with all the bells and whistles (along with missing images and formatting).  I would welcome the feedback and any discursive comments you may have about this piece. Enjoy.

“Corporate governance is concerned with holding the balance between economic and social goals and between individual and communal goals….the aim is to align as nearly as possible the interests of individuals, corporations, and society” Sir Adrian Cadbury (1999)

Introduction

In this coursework I will be looking at Corporate Governance today and how it came to be today, within an industry I will also assess how corporate governance theories can be applied to a situation that has occurred and what can be learnt from this.

The development of Corporate Governance Today

Within UK corporate governance the key aspects are that a single board are collectively responsible for the success of the company. There are 4 points that are key to governing an organisation in a checks and balances exercise;

• The roles of Chief Executive and Chairman are separated
• There is a balance in Executive and independent non-Executive directors
• The organisation has strong, independent audit and remuneration committees
• There is an annual revaluation by the board of its performance

There is an emphasis on objectivity within directors and the interests of the organisation, there should also be a transparency on appointments awarded by the organisation and remunerations made by the organisation. Shareholders have effective rights from a legal standpoint within the governing of an organisation. This ‘Code of best practice’ is not a legal requirement but is rather a guidance on how to do things within the organisation, which is why it is given a ‘Comply or Explain’ requirement for listing meaning that if an organisation does not follow the UK Corporate Governance Code, they must explain as to why they see fit to do something else. “The Code is not a rigid set of rules. It consists of principles (main and supporting) and provisions. The Listing Rules require companies to apply the Main Principles and report to shareholders on how they have done so.” (FRC June 2010)

EPIC Games and Unreal Engine 3

EPIC Games is a studio that to me epitomizes a singular studio that has the power to define a console. With their unreal engine tech, its usability and how so many developers license it to make their games on the list of Unreal Engine 3 games clearly show the sheer amount of developers working with the engine and the nature of the games that it is used to develop. With EPIC Games designing their engine for certain hardware it leaves the systems that they do not do this for with the choice, the development studio could try to shoehorn the engine or older versions onto the system that provides a less than ideal result and initiates what could be a costly exercise, or find some other engine. Finding another engine to develop a game on is mostly a non-choice because when its a multi-platform game it seldom works out the best, leaving then the systems without UE compatibility out of a multi-platform IP.