3. Corporate Governance Flashcards Preview

CIMA E1 Organisational Management > 3. Corporate Governance > Flashcards

Flashcards in 3. Corporate Governance Deck (28)
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1

Stakeholder

a group or individual who has an interest in what an organisation does

2

Types of stakeholder

Internal
Connected
External

3

Internal stakeholder

employees
managers

4

Connected stakeholder

shareholder
customer
supplier
finance providers

5

External stakeholder

community at large
environmental pressure groups
government
trade unions

6

Ethics

moral principles that examine the concept of right and wrong

7

CIMA code of ethics

COPPI
Confidentiality

Objectivity

Professional competence

Professional Behavior

Integrity

8

Corporate Social Responsibility CSR

company should be sensitive to the needs and wants of all stakeholders

9

CSR dimensions

Economic
Legal
Ethical
Philanthropic

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Advantages of CSR

Customer expectations

Brand name

Lower environmental costs

Trading opportunities

Access to staff

Investment and funding

Sustainable business

11

Corporate governance

the system by which companies are directed and controlled
the separation of ownership and control

12

Agents

managers act as agents of the owners (shareholders)

13

Features of UK corporate governance code

Must hold AGM

Separate CEO and chairman

Board members must be trained at the cost of the company

Board members are independent in thought

14

Independent non execs NEDS

should represent the shareholders

15

Non exec directors NEDS

50% of the board

Renumeration committee

Audit committee

16

Nomination committee

decide on appointments to the board

50% of this committee should be NEDs

17

Remuneration committee

100% NEDs

18

Audit committee

Consists of NEDs

internal and external auditors report to committee, committee then reports to the board

19

US Sarbanes Oxley applies to companies

if they are part of a company listed on the US stock exchange

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Regulation

government interference to ensure needs of stakeholders are met and businesses act in the public interest

21

Effective regulation

safe and effective product or service is delivered and not inhibit the function of the business

22

Efficient regulation

total benefit to the nation is greater than the total cost

23

The Competition Act 1998

prevents mergers creating monopolies

24

The Enterprise Act 2002

to stop price fixing

limiting production

dividing up markets

25

Corporate Political Activity (CPA)

Organisations can get involved by;

Buffering - lobbying government

Bridging - monitoring

26

Corporate political activity is undertaken

to secure policy preferences

27

Buffering

firms influencing the external environment by employing lobbyists, donations to party funds

28

Bridging

firms may track the development of laws and regulation to have compliance in place when the legislation is passed