Corporate Governance Flashcards
1
Q
what is corporate governance?
A
The systems in which a company is directed and controlled. Shareholders need to satisfy board of directors to govern the companies in an appropriate way.
2
Q
What are agency problems and why do they arise?
A
Business unable to run the business all themselves so have to rely on agents.
- information asymmetry
3
Q
Advantages and disadvantages of a principles basis
A
advantage
- encourages directors to follow spirit of code
- rules based encourages tick box mentality
disadvantage
- broad general meaningless statements
- specific details may be hard to for directors to meet
