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    2 Corporate Governance

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    Arlene Garcia
    1. The board of directors oversees management and ensures accountability, fairness, and transparency. 2. The corporate secretary ensures compliance with laws and board procedures. 3. Management executes strategy and operations to achieve objectives. 4. Employees contribute their skills and are concerned for fair treatment. 5. Unions represent employees and advocate for their interests and welfare. 6. Shareholders invest capital and want a return as well as transparency on company performance. 7. External auditors independently assess financial reporting and provide assurance to shareholders.

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    2 Corporate Governance

    Uploaded by

    Arlene Garcia
    28 views12 pages
    1. The board of directors oversees management and ensures accountability, fairness, and transparency. 2. The corporate secretary ensures compliance with laws and board procedures. 3. Management executes strategy and operations to achieve objectives. 4. Employees contribute their skills and are concerned for fair treatment. 5. Unions represent employees and advocate for their interests and welfare. 6. Shareholders invest capital and want a return as well as transparency on company performance. 7. External auditors independently assess financial reporting and provide assurance to shareholders.

    Original Title

    2-Corporate-Governance

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    1. The board of directors oversees management and ensures accountability, fairness, and transparency. 2. The corporate secretary ensures compliance with laws and board procedures. 3. Management executes strategy and operations to achieve objectives. 4. Employees contribute their skills and are concerned for fair treatment. 5. Unions represent employees and advocate for their interests and welfare. 6. Shareholders invest capital and want a return as well as transparency on company performance. 7. External auditors independently assess financial reporting and provide assurance to shareholders.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    28 views12 pages

    2 Corporate Governance

    Uploaded by

    Arlene Garcia
    1. The board of directors oversees management and ensures accountability, fairness, and transparency. 2. The corporate secretary ensures compliance with laws and board procedures. 3. Management executes strategy and operations to achieve objectives. 4. Employees contribute their skills and are concerned for fair treatment. 5. Unions represent employees and advocate for their interests and welfare. 6. Shareholders invest capital and want a return as well as transparency on company performance. 7. External auditors independently assess financial reporting and provide assurance to shareholders.

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    of 12

    Corporate Governance:

    An Introduction

    Notre Dame of Dadiangas University


    Business College – Accountancy Program

    Module Prepared by: Prof. Jon Leo J. Licayan, CPA


    Corporate Governance, defined
    The OECD says corporate governance is a:
    • …set of relationships between a company’s directors, its
    shareholders and other stakeholders.
    • …structure through which the objectives of the company are set,
    and the means of obtaining these objectives and monitoring
    performance.
    Corporate Governance, defined
    The IIA says governance is:
    • …the system by which a company is controlled and directed.
    Governance includes the rules and procedures for making
    decisions on corporate affairs to ensure success while maintaining
    the right balance with stakeholders’ interest.
    • Governance is the leadership and direction given to a company so
    that it can achieve the objectives of its existence.
    Corporate Governance, defined
    Cadbury Report of 1992 said:
    • Corporate Governance is the system by which organizations are
    directed and controlled.
    Breakout Room Discussion
    • In your respective breakout rooms, discuss the systems that you
    have observed in order direct and control the operations of Royal
    Flora Holland.
    • From your shared observations:
    1. Identify at least 3 benefits of corporate governance.
    2. Identify at least one “possible downside” of governance.

    Breakout Room Rules:


    1. Identify your facilitator, time-keeper, and documenter/s.
    2. Time-limit for breakout room discussion is only 15 minutes. 5 minutes
    brainstorming, 7 minutes discussion, and 3 minutes wrap-up.
    3. All learners are encouraged to participate in the group discussion as the
    presenters will be identified randomly.
    Benefits of Corporate Governance
    1. Improved risk management system.
    2. Clear accountability for executive decision making.
    3. Focuses management attention on introducing appropriate
    systems of internal control.
    4. Encourages ethical behavior and a CSR perspective.
    5. Safeguard the organization from the misuse of assets and
    possible fraud.
    6. Attract new investment into a company.
    7. Put limits on excessive director remuneration.
    Downside to Governance
    1. Develop an excessively risk adverse culture amongst mangers.
    2. Too much reporting and not enough time to seek and pursue profit
    making activities.
    3. Damper entrepreneurial activities.
    4. Too much excessive supervision, red tape and bureaucracy.
    5. Cost of operating internal controls exceeds any possible benefits.
    6. Possibility that the focus on meeting different stakeholder
    expectations will confuse management as to their corporate
    responsibilities.
    CORE PRINCIPLES OF CORPORATE GOVERNANCE
    Qualities that best Qualities that ensure honest
    decisions are made. and transparent disclosures

    • Integrity • Transparency
    • Fairness • Honesty
    • Judgement • Responsibility
    • Independence • Accountability
    • Skepticism • Innovation

    • Reputation
    Framework by BPP Learning Media. Approved by ACCA
    CORE PRINCIPLES OF CORPORATE GOVERNANCE
    • Integrity
    • Behaving in accordance with high standards of behavior and a strict
    moral or ethical code of conduct. Honesty in all dealings.
    • Fairness
    • Respecting the rights and views of all groups with legitimate interest.
    Balanced view.
    • Judgement
    • Being able to make complex judgments with objectivity in the interest
    of the organization. Decisiveness.
    • Independence
    • Free from bias, undue influence or conflict of interest. Independence
    in mind and in appearance.
    • Skepticism
    • Considering all parts of the business with an open mind. No
    preconceptions.
    CORE PRINCIPLES OF CORPORATE GOVERNANCE
    • Transparency
    • Full disclosure of material matters which could affect the decision of the
    stakeholders.
    • Honesty
    • Truthful and not misleading disclosures.
    • Responsibility
    • Acknowledgement of praise or blame. Open management for errors and
    failures.
    • Accountability
    • Having to answer for the consequences of actions and knowing who that
    relates to. Accountability to all stakeholders.
    • Innovation
    • Openness to change and governance must stay fit for purpose regardless.
    • Reputation
    • Stakeholders’ perception to the organization.
    Research 1
    Research about the Interests or Roles of the following Internal and
    External Parties in Corporate Governance
    1. Board of Directors
    2. Corporate Secretary
    3. Management
    4. Employees
    5. Unions
    6. Shareholders
    7. External Auditors
    8. Regulators
    9. Government
    10. Stock Exchanges
    11. Potential Investors

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