Unit 4 Section A Flashcards
(30 cards)
Corporate Governence
The system by which companies are directed and controlled. The processes, rules, and laws that guide the management and operation of a corporation to ensure accountability, fairness, and transparency in the company’s relationship with all stakeholders.
Accountability
The fact or condition of being accountable; responsibility. The obligation of individuals or organizations to answer for their actions and decisions, and to be held responsible for any outcomes.
Oversight
The action of overseeing something, especially the management or operation of a system. Supervision or scrutiny over the activities of an organization or system, ensuring it operates correctly, ethically, and within the law.
Risk Management
The process of identifying, assessing, and controlling threats to an organization’s capital and earnings. The practice of recognizing and mitigating potential risks that could negatively affect an organization’s performance and objectives.
Board of Directors
A group of individuals elected to represent shareholders and oversee the activities of a corporation. A governing body in a company, typically consisting of individuals elected to make decisions on behalf of the shareholders and ensure that the company is managed in line with legal and ethical standards.
Ethical Leadership
Leading with integrity, responsibility, and fairness. Leadership based on moral principles that prioritize honesty, fairness, and respect for others while making decisions.
Regulations
Rules or directives made and maintained by an authority. Legal or official rules established by governing bodies or institutions that control how businesses or individuals behave in specific areas of activity.
Investor Confidence
The trust and belief that investors have in the financial stability, leadership, and governance of a company. The level of trust that investors have in a company’s management and its potential for future success, influencing investment decisions.
Financial Integrity
The quality of being honest and transparent in financial dealings. A commitment to upholding honesty and accuracy in financial reporting, ensuring that financial information is presented fairly and truthfully.
Regulatory Bodies
Organizations that are responsible for overseeing and enforcing laws and regulations in a specific industry or sector. Government or independent organizations that establish and monitor rules, regulations, and standards for the operation of industries and businesses.
Independent Directors
Members of a company’s board of directors who are not involved in the day-to-day management of the company. Board members who do not have any material or financial interest in the company outside of their role as a director and are expected to make impartial decisions.
Corporate Scandals
Events or actions that cause public outrage and harm a company’s reputation, often due to unethical or illegal behavior. Incidents or activities within a corporation that result in a loss of public trust or legal consequences due to misconduct, fraud, or other unethical practices.
Decision-Making
The process of making choices or reaching conclusions after considering different options. The cognitive process of identifying and selecting a course of action from among alternatives to resolve issues or make judgments.
Executive Management
The group of senior managers who are responsible for the overall management and strategic direction of an organization. The team of senior executives (such as CEOs, CFOs, and COOs) who are responsible for implementing policies and decisions made by the board of directors and managing the day-to-day operations of the company.
Legal Framework
The system of laws and regulations that governs a specific area of activity. The set of rules and laws that provide the foundation for operating within a jurisdiction or industry, ensuring compliance and governance.
Market Reputation
The public perception of a company’s ability to meet its commitments and operate ethically. The image or perception that a business has in the marketplace, often influenced by its past actions, customer relations, and reputation for ethical behavior.
Risk Assessment
The process of identifying and evaluating risks associated with a business or project. A systematic process for identifying potential risks, evaluating their severity, and determining ways to mitigate or manage them effectively.
Governance Framework
A structure that outlines the rules, practices, and processes used to govern an organization. The system of structures and processes that define how decisions are made and how an organization is controlled, ensuring that the interests of stakeholders are protected.
Sarbanes-Oxley Act
A U.S. federal law that set new or enhanced standards for public company boards, management, and public accounting firms. A law enacted in 2002 aimed at protecting investors from fraudulent financial reporting by corporations, introducing stringent auditing and financial disclosure requirements.
ESG (Environmental, Social Governance)
A set of standards for a company’s operations that socially conscious investors use to screen potential investments. A framework for evaluating the ethical impact of a company’s business practices in three key areas: environmental responsibility, social impact, and governance practices.
Corporate Ethics
The application of ethical principles and standards to business conduct. The moral guidelines and practices that organizations adhere to in order to act responsibly and fairly in business operations.
Financial Disclosure
The process of making financial information available to the public, typically regarding the financial status of an organization. The release of financial statements and other relevant data to inform stakeholders about a company’s financial performance and risks.
Shareholder Rights
The legal rights that shareholders have in relation to the company they invest in. The entitlements of shareholders, including the right to vote on key decisions, receive dividends, and be informed about the company’s financial health.
Business Ethics
The study and practice of ethical principles and moral or ethical problems that arise in a business environment. A set of moral guidelines and principles that govern business conduct and decision-making, ensuring fairness, honesty, and transparency in operations.
