Chapter 11- Governance & ethics Flashcards
Agency problem? (governance)
ownership & control are separated
conflict (managers & shareholders)
Public policy of Corporate Governance’s King Report 3 core aspects?
leadership
sustainability
good corporate citizenship
stakeholder perspective of corporate governance?
balance of:
individual & communal goals
economic & social goals
corporate perspective on corporate governance?
achieve long term sustained value of corporate governance
stewardship perspective of corporate governance
best interest of the company
symptoms of serious conflict of interests?
financial collapse w/o warning
disguise true financial performance
director remuneration dispute
satisfy mgr wishes
poor corporate governance symptoms
board dominion ❌board involvement ❌control function ❌supervision ❌independent scrutiny(EA/IA) ❌shareholders contact short term profitability misleading FS
2 types of governance structure?
principles based & shareholder based
principles based governance structures OECD Principles?
Stakeholders’ rights
Accountability to shareholders
Market transparent/fair
Accurate/timely disclosure
requirements of
Companies (Miscellaneous Reporting) Regulations
2,000 employees
£200million turnover
£2billion b/s total
2 types of board structures
unitary
dual/supervisory
supervisory board?
elected by shareholders
committees with delegated powers
Wates principles?
Purpose & leadership Board composition Stakeholder relationship & engagement Remuneration Opportunity & risk Division of responsibilities
Nolan principles by Committee for standards in Public Life (co. ethical values)
Honesty Accountability Integrity Openness Objectivity
Institute of business ethics (co. ethical values)
Fair Openness Respect Trust Transparent
