TOPIC 8 : CORPORATE GOVERNANCE

Which is NOT TRUE about the needs for corporate governance?

• To avoid mismanagement

• To enable companies operate more efficiently, to improve access to capital, mitigate risk and safeguard stakeholders

• To increase the accountability of your company and to avoid massive disasters before they occur

• To analyze of an organization's operations and maintenance of systems of internal controls can help detect and prevent various forms of fraud and other accounting irregularities.

Who runs the company operations for large companies?

• Shareholders

• Board of Directors

• External auditors

• Stakeholders

Which is BEST definition for Corporate Governance?

• A system of law and sound approaches by which corporations are directed and controlled focusing on the internal and external corporate structures with the intention of monitoring the actions of management and directors and thereby mitigating agency risks which may stem from the misdeeds of corporate officers

• A part of regulatory and market mechanisms, the roles and relationships between a company’s management, its board directors, its shareholders and other stakeholders, and the goals for which the corporation is governed

• Essentially involves balancing the interests of a company's many stakeholders, such as shareholders, senior management executives, customers, suppliers, financiers, the government, and the community.

• Refers to the way a corporation is governed. It is the technique by which companies are directed and managed. It means carrying the business as per the stakeholders' desires

Which are elements for the needs of good governance?

• Good board practices

• Control environment

• Well-defined shareholders

• Transparent disclosure

• Board commitment

What is it means by good board practices?

• Board of Directors clearly defined roles and authorities.

• Planning appropriate Board procedures

• Risk management framework present

• Director remuneration in line with best practice

a) Financial information disclosed

b) Non-financial information disclosed

c) Financial prepared according to International Financial Reporting Standards (IFRS)

The point above suitable for need of good governance of

• Control environment

• Board commitment

• Well-defined shareholders

• Transparent disclosure

Elements of an Effective Corporate Governance System are

• Accountability

• Transparency

• Regulatory framework

• Business ethics and social responsibility

Which is BEST explanation for administrative structures?

• By initiating recycling efforts and reducing waste and pollution. Good corporate governance identifies ways to improve company practices and also promotes social good by reinvesting in the local community.

• To ensure this accountability, directors must be accessible to shareowner inquiry concerning their key decisions affecting the company’s strategic direction.

• Any information about a company, both financial and non financial should be easily made available and understood by the public.

• The structure of a corporation’s governance determines the efficiency and accuracy of the flow information through and from a corporation.

"A good corporate citizen is increasingly seen as one that is non-discriminatory, non-exploitative and responsible with regard to environmental and human rights issues."

Above statement refers to the element of corporate governance

• Accountability

• Transparency

• Regulatory framework

• Business ethics and social responsibility

Which of the answer below explain the elements of corporate governance for Administrative Structure?

• Corporate governance encompasses rules as well as the framework of relationships and process designed to ensure that company managers and directors act in the interests of the company and, ultimately, shareholders.

• When employees understand management’s strategies and are allowed to monitor the company’s financial performance, they understand their roles within the company.

• Dishonesty between management and board of members, or board members and shareholders, weakens the health of a corporation’s governance.

• A company is likely to experience indirect economic benefits such as improved productivity and corporate reputation by taking those factors into consideration.