Meta-cola initiated the business in 1886 in Atlanta as local soda producer. Georgia (US) is selling around nine beverages each day. In 1920s, the organization had started increasing globally, selling its items first in the Soviet Union and America. In the end of 20th century, the organization was selling its items in each of the country present in the world. In the year 2005, it became the largest marketer, distributor, and manufacturer of syrups and non-alcoholic beverages. Meta-Cola is the organization which is listed in the Stock Exchange of New York.

Since the mid 1980s, the Board of Directors has seen the benefits of having independent directors, including their fresh ideas and new approaches to the company. Of the current seven Board members, four are independent. The Chairman of the Board does not have any CEO responsibilities. His only means of influencing management are through the Compensation and the Audit committees and at the monthly Board meetings where financial results, budgets and strategy are analyzed and approved. Key senior managers are chosen based on professional and merit criteria. The remuneration of directors was not made transparent by management of Meta Cola Company. These were not arbitrarily determined. This resulted in creating a conflict between management and board of directors of Coca Cola. There is remuneration paid for attending each Board meeting, normally held once per month. The executive compensation is fixed taking into consideration comparative market information, reviewed and approved by the Compensation Committee of the Board. Approximately 20% of the senior managers’ total compensation is linked to performance. To date, no stock options are granted to senior managers or Board members. The up-coming annual report will disclose the total amount distributed to directors and managers on an aggregate basis. Coca Cola has two Board committees:

Audit Committee with 4 members—3 directors (one inside and two external directors none being the Chairman of the Board) and a Fiscal Board member. A representative of the external auditors, a representative of the internal auditor and the CEO also are invited to attend Audit Committee meetings; and Compensation Committee composed of 2 directors (one inside and one external member neither being the Chairman of the Board)

The shares of the company are listed in NYSE. The company finds that the current share price is fully reflecting the information about past prices and trading volumes. The company has also observed that the share price changes rapidly to accounting information as and when released.

a. What are the elements of good corporate governance?

b. Critically evaluate the elements of corporate governance in Meta-Cola (Maximum 300 words +/- 10%)

c. Comment on the type of efficiency of the market in which the shares of Meta Cola is traded and the level of information value of accounting information in that market.