corporate governance

principles of corporate governance

1. accountability 2. transparency 3 3. fairness 4. responsibility

CEO duality

A situation in which an individual holds both the CEO and chair of the board title

The purpose of corporate governance is to:

Encourage the efficient use of resources and require accountability for the stewardship of those resources.

purpose of corporate governance

Encourage the efficient use of resources and require accountability for the stewardship of those resources.

Effective ownership and reporting structures within an organization are necessary for ensuring which of the following principles of corporate governance?

accountability

G20/OCED principles are not

required to be applied, but serve as a framework

Which of the following principles of corporate governance pertains to the duty of internal parties to act in the best interest of the organization?

Responsibility

Per the G20/OCED principles of corporate governance, an entity's corproat governance framework should

1. Promote transparent and fair markets and the efficient allocation of resources. 2. Be consistent with the rule of law. 3. Support effective supervision and enforcement. Protect and facilitate the exercise of shareholders' rights. 4. Ensure the equitable treatment of all shareholders, including minority and foreign shareholders. 5. Provide all shareholders with the opportunity to obtain effective redress for violation of their rights. 6. Create sound incentives throughout the investment chain. 7. Enable stock markets to function in a way that contributes to good corporate governance. 8. Recognize the rights of stakeholders established by law or through mutual agreements. 9. Encourage active cooperation between corporations and stakeholders in creating wealth, jobs, and the sustainability of financially sound enterprises. 10. Ensure that timely and accurate disclosure is made on all material matters regarding the corporation, including the company's financial situation, performance, ownership, and governance. 11. Ensure the strategic guidance of the company, the effective monitoring of management by the board, and the board's accountability to the company and the shareholders.

advantages of not having CEO Duality

1. better alignment with corporate governance best practices 2. improvement of CEO accountability 3. reduciton in CEO's potential conflict of interst 4. more effective board oversight

G20/OCED Principles of Corporate Governance

1. governments have effective framework 2. protection of shareholder rights 3. instiutional invesotrs 4. stakeholders in corporate governance 5. timely disclosures 6. board structures

Audit committee best practices

1. mandatory independent audit committee 2. written charter 3. adequate resources and authority 4. informed and vigilant members

Transparency

in the context of corporate governance generally refers to the clarity, accuracy, completeness, and timeliness of the financial statements and other information provided by management to shareholders.

Compensation Committee

subgroup of the board of directors that is composed of directors who are not officers of the firm with HR experience

Audit Committee

the outside, independent board of director members responsible for financial reporting, regulatory compliance, internal control, and hiring and overseeing internal and external auditors