Executive Leadership and Governance of Disney
PART A – Board Review Report for new and Existing Board Members
Organizational Culture and the Role of the Board
Leadership style and organizational culture
In this report, “Executive Leadership and Governance of Disney,” we discuss Disney’s management style, which is characterized by an emphasis on novelty, creativity, and customer happiness. The company’s leaders are considered visionaries since they have set extraordinarily high standards for the entire organization. Disney’s management team encourages open conversation and cooperation between departments to improve problem-solving and the development of innovative new offers.
Disney’s corporate culture is based on the ideals of “dream, believe, dare, do” and places a priority on uniqueness, risk-taking, and the constant pursuit of quality. The company believes that every experience should be as captivating and engaging as a story. Disney’s culture also emphasizes hard labor, paying close attention to detail, and working as a team.
The company’s overall success can be traced in significant part to its leadership and culture. Disney has remained at the forefront of the entertainment business due to its commitment to technological innovation and customer service, which has allowed the corporation to develop a globally renowned brand.
Read more: Executive Leadership and Governance of BHP Group
Board Duties
The Disney board of directors is responsible for overseeing corporate operations and ensuring that the company is run in the best interests of Disney stockholders. The board’s key responsibilities are as follows:
Strategic Planning
The company’s long-term strategic plan is to be developed by the board of directors, who are also in charge of securing the board’s approval for the plan. This plan outlines the outcomes and subsequent actions that the board of directors expects the organization to accomplish.
Risk Management
The board of directors is in charge of determining any and all obstacles that stand in the way of the progression of the firm. It does not matter if the obstacles are of a financial, operational, legal, or reputational nature; the board must identify them all.
Executive oversight
The chief executive officer (CEO) and any other senior executives are all selected by the board of directors, which is also held accountable for their work.
Financial Oversight
The board must approve the annual budget, monitor the company’s financial reporting, and ensure that everything in accounting and financial reporting is in order.
Governance
The Board of Directors is responsible for the company’s compliance with all applicable laws, rules, and ethical standards. The company’s governance rules and processes must be developed and followed.
Members of Disney’s board of directors are elected by shareholders to represent their best interests. The board is accountable not just to shareholders, but also to regulatory bodies and the general public, who rely on the corporation to act ethically and responsibly.
Annual Report
Disney’s annual report is a detailed account of the business’s financial and operational status throughout the preceding year. Common sections of reports include:
Letter to shareholder
At the outset, the CEO or Chairman of the Board will pen a letter to the shareholders, updating them on the company’s current status and future intentions.
Business overview
The company’s key markets and business categories, where we may learn things like the nature of the company’s competitors, how they respond to new products, and market trends.
Financial Performance
The company’s financial performance in terms of revenue, net income, cash flow, and important financial ratios. Economic Outcomes. The cash flow and financial health of the organization are also analyzed in the report.
Governance
The last section is titled “Governance,” and it discusses the company’s rules and procedures for its board of directors, executive compensation, and other aspects of corporate governance.
Social Responsibility
In the fifth section, under “Social Responsibility,” we cover the company’s efforts to do better for the environment, the community, and its employees.
The annual report informs investors and others about the company’s status and prospects. The report can inform investors about the company’s finances and long-term prospects. This data helps analysts, regulators, and the public understand the company.
Corporate Governance
Framework
Disney’s corporate governance framework was created to protect the interests of its shareholders and other stakeholders. The Disney board of directors is responsible for ensuring that the company abides by all existing laws, regulations, and ethical standards. The board’s members come from a wide range of disciplines, including show business, finance, and boardroom policy. The goal of Disney’s executive compensation policy is to align the interests of executives and shareholders.
The incentives under the program range from immediate to long-term, and they are all based on the company’s success and its impact on shareholder value. Disney’s shareholders have the right to vote on major issues, elect directors, and be kept up to date on the company’s progress because of the safeguards built into the company’s governance structure.
Disney has a code of ethics and behavior that underlines the company’s commitment to doing the right thing and following the law. The corporation has also established a hotline where employees and others with inquiries, complaints, or suspicions of misconduct can call. The company’s governance structure identifies and addresses financial, operational, legal, and reputational risks to its performance. The fundamental goal of Disney’s corporate governance system is to ensure that the firm is managed in a long-term and ethical manner that benefits all of Disney’s stakeholders.
Remunerations Committee Role
Disney’s executive compensation is set by and managed by the compensation committee. The committee is made up of non-executive directors and its job is to make sure that the company’s compensation policies are looking out for shareholders.
The pay plan at Disney does a good job of encouraging top management to focus on the company’s long-term financial health. Executives’ interests are linked with those of shareholders because of the program’s stock ownership requirement and the short- and long-term rewards tied to the company’s financial performance.
However, the compensation committee’s function at Disney has come under fire. It has been argued that the complexity of the pay program makes it impossible for shareholders to comprehend the factors that go into determining CEO compensation. Some investors have complained about the high salaries of company executives.
The compensation panel at Disney has been criticized for being too secretive. The group holds its meetings in private, and the company doesn’t always make executive compensation easily accessible to the public. The lack of transparency has led some to question the program’s objectivity and neutrality.
The remuneration committee could do a better job in a few critical areas, but overall Disney’s compensation plan strikes a good balance between executive and shareholder interests. There would be less cause for worry and confusion about the program if it were more transparent and easy to grasp.
Regulatory Landscape and Management of Risk
Boards Responsibility
The Disney Board of Directors is in charge of monitoring and controlling the company’s risk exposure and ensuring that risk management procedures are successful. The board of directors is responsible for identifying and managing risks to the company’s operations, financial performance, reputation, and the health and safety of its employees, customers, and other stakeholders.
To carry out this role, the Board has developed a risk management framework, which includes the systematic and integrated identification, assessment, monitoring, and reporting of risks. The framework includes the following elements:
Risk Identification
The board of directors identifies risks to the company’s finances, operations, legal position, and public image on a regular basis.
Risk Assessment
The board ranks the risks from greatest to least severe based on their likelihood and potential impact.
Risk Mitigation
The board works with management to develop and implement risk-reduction strategies. Assigning resources to high-priority risks and defining rules and processes for risk prevention, detection, and management are all part of this.
Risk Monitoring
The company’s risk management strategies are reviewed and updated as necessary by the board of directors.
Risk Reporting
First, the board of director’s reports on the company’s risk management plans and updates shareholders and other stakeholders on any major risks that have been discovered.
Regulatory Landscape
Disney faces a complicated and ever-changing regulatory landscape. Disney is subject to numerous laws and regulations, including those pertaining to the media, entertainment, intellectual property, labor, health and safety, environmental protection, and taxation, because of the nature of the industry in which it operates.
Disney’s success may be significantly affected by the government. Organizational survival, reputation protection, and protection from catastrophic fines are all contingent on the company’s ability to follow the law. The company’s competitiveness, growth prospects, and profitability could all suffer if the government enacts new or revised regulations.
Disney’s capacity to purchase or combine with other firms or distribute its content across different platforms, for example, could be impacted by changes in legislation controlling media ownership and content distribution. It’s also possible that a shift in labor laws could affect the business’s wage bills and management style.
To keep an eye on and shape legislation at the federal and state levels, Disney employs a full-time government relations team. To protect its interests and promote legislation that are helpful to its operations, the company is active in forums with regulatory bodies, government agencies, and trade associations.
Disney has been under increased scrutiny from regulators in recent years due to concerns over its theme park business, data privacy practices, and streaming market competitiveness. For instance, the company has been criticized for its handling of users’ personal information, which has led to a number of high-profile data breaches and fines. Since the company has become so dominant in the entertainment industry after purchasing 21st Century Fox, antitrust investigations have been initiated.
Disney’s success may be significantly influenced by regulators, but the regulatory landscape is dynamic and difficult to navigate. The company needs to adopt a proactive stance on regulatory compliance and keep in touch with regulators to make sure its interests are taken into account during the regulatory decision-making process.
Risks of Disney
Disney, like any other significant corporation, faces the risk of having its business, finances, and image harmed by a variety of circumstances. The following are some of Disney’s most serious threats:
Economic Risk
First, there is the danger of an economic slowdown, as Disney’s profits are very vulnerable to consumer spending. During a recession or economic slowdown, less consumer spending on entertainment and tourism could harm Disney’s bottom line.
Competition
Disney confronts severe competition in several of its business verticals, including the media and entertainment industries, theme parks, and streaming media. The emergence of new competitors or the continuous success of current ones may impede Disney’s market share and revenue growth.
Cyber security
As a media and entertainment conglomerate, Disney collects and stores a large amount of personal information about its customers. A data breach or cybersecurity disaster can result in reputational damage, legal penalties, and monetary losses.
Natural Disasters and Pandemics
Disney’s theme parks and resorts are located in hurricane, wildfire, and other disaster-prone zones. Furthermore, as a result of the pandemic’s impact on both its theme park and theatrical operations, Disney has suffered significant financial losses.
Regulatory Risk
Changing laws and regulations governing media ownership, content distribution, labor, and environmental protection are just a few of the regulatory risks Disney faces as a result of its highly regulated business.
Disney is facing a number of concerns that could have an impact on its operations and profitability. Insurance policies, cyber security protocols, and crisis management plans are just a few of the risk management strategies implemented by the firm to combat these dangers. However, unforeseen events or developments may have an impact on the company’s ability to achieve its business objectives.
PART B – Executive Leadership Report
Introduction
Disney is a global phenomenon as well as a major presence in the media and entertainment industries. The company’s success is dependent on its ability to create regionally relevant content, products, and experiences for a global audience. Disney’s success can be linked back to the company’s leadership, therefore it’s critical to assess the advantages and disadvantages of that leadership to ensure it lasts as long as feasible.
This study will examine Disney’s management style and define the benefits and drawbacks of the existing leadership team. The report will use module concepts and methods to provide a complete analysis of Disney’s administration.
Task 1 – Leadership and Management
Leadership and Management style
Management and leadership at Disney are distinctive due to the company’s emphasis on creativity, collaboration, and happy customers. Disney’s management and leadership may be evaluated using two fundamental paradigms: transformational leadership and the servant leadership model.
A transformative leader sets an example that motivates their followers to realize their own potential and contribute to a greater goal. A transformative leader is one who motivates and rallies those under their command to achieve extraordinary things.
They are also well-known for their ability to build powerful teams that are capable of extraordinary feats. Because Disney is so well-known for its emphasis on creativity and innovation, the company’s leadership style is a good fit for the transformational leadership paradigm.
Bob Chapek, CEO of Disney, is widely regarded as a pioneer in the business world. He promotes an environment where employees are free to think outside the box and take risks. In addition to his evident talent for inspiring and motivating others through clear and fascinating speech, Chapek is largely acknowledged to be one of the best business CEOs.
The Servant Leadership Model suggests that leaders are more effective when they prioritize the needs of their followers over their own. Since Disney is known for putting the needs of its customers first, the company’s management style is well suited to this paradigm.
At Disney, leaders are urged to adopt a servant leadership stance, which requires them to prioritize the interests of their followers before their own. By referring to their employees as “cast members” and encouraging them to see themselves as contributing members of a larger team, the organization is able to demonstrate its commitment to cooperation and collaboration and live up to the “cast member” culture it has adopted.
The management and leadership at Disney are known for their dedication to innovation, teamwork, and customer satisfaction. Organizational leaders are urged to adopt a transformational and servant leadership style, which prioritizes the needs of the company’s customers and employees over those of the leader and fosters an environment in which followers are inspired and motivated to reach their full potential. It’s possible that this strategy, which has been a tremendous force behind Disney’s growth and innovation, is largely responsible for the company’s sustained success.
Comparison with competitor
Disney’s management style is different, and it contrasts sharply with those of the company’s competitors in the media and entertainment industries. Disney’s main competitors are NBCUniversal and WarnerMedia. Here’s how Disney’s leadership compares to that of its competitors, as well as any potential issues that could stymie Disney’s growth.
Leadership Style difference of Disney and WarnerMedia
The method of management that Disney employs is one that is generally characterized as being one that is centered on collaboration and consensus, with an emphasis placed on the cultivation of strong ties and the establishment of trust. On the other hand, Warner Media tends to have a leadership style that is more hands-on and direct, with a focus on decision-making and responsibility as its primary concerns.
Leadership Style
Disney’s management philosophy is notable for its emphasis on uniqueness, creativity, teamwork, and audience demands. Organizational leaders are encouraged to embrace a transformational and servant leadership style that prioritizes the needs of the company’s customers and employees over the leader’s own and develops an environment in which followers are inspired and driven to attain their maximum potential.
Warner Media’s management philosophy prioritizes efficiency and leanness. In recent years, significant changes have been made to the organization in order to reduce costs and increase output.
Comcast executives prioritize the company’s financial line and shareholder returns. The senior executives are profit-driven and have a history of cutting costs wherever possible.
Issues for Disney’s Future Development
The increased rivalry in the media and entertainment industry may imperil Disney’s future revenues. Disney is competing in the media business with powerful newcomers such as Netflix and Amazon. To be competitive, Disney must continue to innovate at a consistent pace and be adaptable enough to changing consumer preferences.
Another source of concern is the potential impact of new laws on Disney’s future expansion. Changes in media and entertainment industry regulation could be disastrous for Disney. Changes in net neutrality legislation or antitrust restrictions, for example, might affect Disney’s competitiveness.
Handling business challenges
Disney has a track record of effectively overcoming challenging business challenges. Here are a few examples of how the company has dealt with difficult issues in the past:
Disney, for example, has repeatedly demonstrated its ability to weather corporate storms by surviving the 2008 financial crisis. During this time, Disney cut costs and refocused on its revenue-generating theme parks and consumer products businesses. The end result was a significant increase in the company’s bottom line.
Disney’s corporate divisions, notably the media and entertainment sectors, have encountered fierce competition. However, in the face of shifting market conditions, the company has demonstrated its ability to adapt to new circumstances and welcome new ideas. Disney+, for example, has quickly gathered millions of users and emerged as a significant challenge to Netflix and other industry heavyweights.
Third, the company’s senior leadership has changed several times, with Michael Eisner being succeeded as CEO by Bob Iger in 2005. Despite this, the group has maintained the same leaders and its goal throughout the shift. Iger managed Disney’s huge growth and development, which included the acquisitions of Pixar, Marvel, and Lucasfilm.
Natural disasters such as hurricanes and earthquakes have posed challenges for Disney. However, a strong emergency management system ensures the safety of all personnel and visitors while keeping operations running as normally as possible.
Task 2 – Leadership for Performance
Balances scorecard
| Perspectives | Objectives | Measures | Targets | Initiatives |
| Financial | Revenue growthReturn on investment Profitability | Market value Increase gross profit margin | 25% per year 20% per year | Diversifying revenue streams |
| Customer | More customers Lower prices Customer retention | Customers ranking Loyalty card | 95% satisfaction rate | Customer loyalty programs |
| Internal | Strengthen brand image | Brand awareness Social media image | 90% engagement rate | Feedback usage |
| Learning | Develop and engage employees | Employee turnover rates Development programs | Yr 1- 75%Yr 4- 95% | Training programs |
Disney may gain insight into its overall performance and progress toward its goals by tracking these key performance indicators across each strategic target. The Balanced Scorecard is a useful tool for businesses to assess their current state and plan for future growth and success.
Leadership for Performance
Adopting Leadership for Performance tactics can significantly aid Disney’s progress toward its Balanced Scorecard objectives. Using this strategy of motivating staff to set clear performance targets will help Disney get closer to its long-term goals.
Disney can utilize objective setting to develop measurable and specified targets for each of the KPIs that comprise the Balanced Scorecard. It will be easier to complete tasks if everyone on the team is on the same page.
Receiving regular performance comments can also help you perform better in the long run. Disney may assist its employees in identifying their strengths and areas for improvement by providing feedback on their achievement of the Balanced Scorecard’s KPIs. Positive effects on morale and engagement may result in increased output.
Effective leadership strategies also emphasize the significance of constantly seeking to improve. Disney can improve in underperforming areas by comparing performance to the Balanced Scorecard KPIs. As a result, both development and increased productivity are feasible consequences.
Finally, Leadership for Performance strategies urge employees to participate actively. Setting precise goals, expressing those goals frequently, and providing regular feedback and career growth opportunities can all assist to increase employee engagement and motivation. Disney can benefit from Leadership for Performance efforts by establishing clear and quantifiable performance targets, offering regular feedback, enabling continuous improvement, and increasing employee engagement and motivation.
Task 3 – Financial Leadership
Financial and non- financial information
When determining whether or not to launch Disney+, the Board of Directors ought to have taken into account both financial and non-financial considerations simultaneously. It would have been prudent for the Board to take into account the following additional sources of information:
To begin, Disney ought to have conducted additional market research to determine the level of interest in a new streaming service and the profile of the existing rivals. This study would have included polls and discussions with focus groups in order to get a better understanding of the streaming service market and how customers feel about the various service providers.
Second, the Board ought to have taken into consideration financial projections for the new service. These projections were to have included estimates of both income and expenditures, in addition to an assessment of the return on investment. These estimates would not have been complete without the inclusion of essential components such as assumptions for future subscriber growth, pricing, and marketing expenditure.
To begin, the Board did not do a technological evaluation to determine whether or not it would be possible to launch a new streaming service with the desired level of success. As part of this process, there need to have been an analysis of the necessary infrastructure and technological investments to support the new service.
Second, the Board of Directors did not conduct an analysis of Disney’s content strategy, which should have included an analysis of the service’s existing library in addition to an estimate of the financial resources required to expand the service with original programming.
Third, the Board need to have taken into consideration numerous rules and regulations that regulate intellectual property rights, licensing agreements, and the possibility of facing legal challenges.
Research on consumer behavior and projections for the economy are most likely to come in first place among these sources in terms of importance and dependability. While financial projections can assist the Board in analyzing the potential return on investment of the new service, market research can shed light on the demand from customers as well as their preferences.
In spite of this, conducting an analysis of these many different information sources is absolutely necessary. Numerous aspects, such as the usability of the technology that is being implemented, the content strategy, and the legal and regulatory framework, all have the potential to have an effect on how well the new service will perform.
The Board of Directors need to have taken into consideration a variety of financial and non-financial considerations before determining whether or not to launch Disney+. The Board of Directors might have been able to make an informed decision by carefully evaluating various sources of information, which would have increased the likelihood of the new service being successful.
Loss over profit
The COVID-19 epidemic and its effects on Disney’s theme parks and theaters, in addition to the huge increase in content expenditures for the introduction of the Disney+ streaming service, were the primary factors for the unexpected turnaround in fortunes that the company experienced in 2020.
Because of the outbreak, Disney was forced to close its theme parks and postpone the debuts of many of its major movie releases. As a result, the company’s parks and experiences segment experienced a considerable reduction in revenue. The considerable number of theater closings and postponements also had an effect on the studio’s entertainment segment.
The launch of Disney+ resulted in a rise in the number of subscribers, but the firm was obliged to make significant investments in both new content and promotion, which hurt the bottom line.
The performance of Disney was on par with those of its rivals in the entertainment business, such as Universal Studios and AMC Theatres, which were all badly affected by the epidemic in the same way. Even though Disney’s theme parks and theaters experienced losses, the business was able to lessen the impact of those losses because to Disney’s leadership position in the streaming industry.
Task 4 – Ethical Leadership
Use of supplier sweatshops
The use of sweatshops by Disney suppliers, particularly for the production of merchandising and clothing, is an example of a problematic ethical decision that the firm has made in the past.
In the late 1990s and early 2000s, allegations surfaced that Disney had a relationship with third-party vendors who manufactured their products in sweatshops. Sweatshops were renowned for employing children and providing awful working conditions for their employees. They also paid very little.
Before the allegations were made public, Disney initially denied that they were aware of the sweatshops and claimed that they had stringent supplier procedures in place to prevent such activities from occurring. As a result of investigations and public pressure, it was discovered that Disney did not do enough to appropriately supervise its suppliers and guarantee that ethical procedures were followed. This was proved by the findings of the investigations.
As a direct result of this, Disney started imposing new criteria with the intention of improving its supplier monitoring and making its procurement practices more ethical. They came up with a Supplier Code of Conduct that outlined the standards of behavior that were expected from its vendors in areas such as ethics, working conditions, and environmental responsibility. They also implemented an auditing program to check the compliance of their suppliers and vendors with these requirements on a regular basis.
The treatment of Disney workers
One area in which Disney’s ethical decision-making in the past has been criticized is the manner in which the business treats its employees, particularly in terms of salary and benefits.
On many instances in the early 2000s, Disney was accused of mistreating its temporary and part-time workers by paying them low wages and without providing them with benefits. Additionally, the company was accused of exploiting its workers’ rights. These kind of allegations were routinely leveled against the cast members and crew members working at Disneyland and Disney World.
In response to these charges, Disney has taken a number of measures to improve the way they treat their employees. They have increased wages and benefits across the board, as well as made a commitment to increase compensation to at least $15 per hour for all workers by the year 2023. In addition to initiatives that are intended to educate and train personnel, they have also developed steps to improve the work-life balance of employees and the overall happiness of those working for the company.
Despite all of these attempts, concerns regarding the way Disney treats its employees have persisted. In the year 2020, Disney was under to criticism for not making sufficient efforts to assist its staff members amid the COVID-19 epidemic by issuing large-scale furloughs or layoffs of workers.
Environmental issues
Disney has been on the receiving end of environmental criticism in the past. Their resorts and theme parks, for instance, produce a great deal of waste, which can lead to pollution and damage to local ecosystems. Their resource, water, and energy utilization has also come under scrutiny.
Disney has responded to these concerns by establishing stricter environmental policies and procedures. They’ve cut down on single-use plastics and increased their use of renewable energy. They have also committed to greener business methods and a decrease in carbon dioxide emissions.
But worries about Disney’s operations’ effect on the planet have persisted. In 2020, for instance, locals in China complained that a Disney theme park had negatively affected the environment. Some have also argued that Disney isn’t doing enough to protect the environment, and that the company could do more to lessen the harm it causes.
Ethical issues with Recommendations
One of Disney’s most pressing moral concerns is the way it portrays people of different backgrounds and cultures in its movies and parks. Disney has been called out before for its negative representation of minorities and the LGBTQ+ community in their movies and TV shows. Low pay and insecurity in the workplace have also been cited as sources of discontent among workers.
Disney needs to make diversity, equity, and inclusion central to all they do to properly address these issues. To do so, they must take measures to guarantee that all demographics and cultures are properly and accurately portrayed in their media and entertainment offerings.
Disney may be able to achieve this by developing new ideas and products with feedback from a wide variety of people, especially those from underrepresented groups. A culture that accepts and celebrates differences can be fostered via the implementation of appropriate policies and training initiatives.
Disney ought to ensure that its workers are paid fairly and have a safe environment to work. In addition to the usual benefits like health insurance, retirement plans, and vacation time, you should provide your employees the chance to progress in their careers.
At the end of the day, Disney needs to make sustainability a top priority. By instituting eco-friendly procedures at its hotels and theme parks, they are decreasing their carbon impact. Disney can show it is serious about being a good corporate citizen and helping to build a better world by putting an emphasis on sustainability.
