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BA-400 Corporate Governance

Terms in this set (15)

What is Corporate Governance
formal system of OVERSIGHT, ACCOUNTABILITY, and CONTROL for organizational decisions and resources
Key corporate governance decisions
Ethical and regulator risks
Regulatory financial reporting
Compensation
Strategic
Financial
Stakeholder
Corporate Governance Framework
directors
fiduciaries
officers
shareholders
stakeholders
Board of directors
elected or appointed body who jointly oversee activities of the company
Independent(Outside) director
Director who does not have a material or pecuniary relationship with a company or related persons
Inside Director
Board member who is an employee, officer, or stakeholder in the company
Officers
C-suite
A management level of employees of a corp. entrusted with DISCRETION in the exercise of Corp. Powers
Fidiciary
A person who holds a legal or ethical relationship of trust with a company
Ex: football players agent
Attorney
Examples of fiduciary Duties
Accurate Financial reporting
Balancing stakeholder interests
Duty of diligence
Make informed and prudent decisions
Corporate Governance and Social Responsibility
Trade offs
Balancing stakeholder interest

Shareholder model- old style company
Stakeholder Model- new style (Care of Corp Resp.)
shareholder model
Focus on owners and managers
Founded in classic economic precepts (Adam Smith) it focuses on improving the formal system of performance accountability between the top management and the shareholders.
Stakeholder model
business is accountable to all its stakeholders, not just shareholders
Board of directors need to be
Independent
Quality(diversity)
Performance
Global corporate governance principles
Ensure effective governance framework
Protect and facilitate shareholder rights
Recognize rights of stakeholders
disclosure and transparancy
Boards carry out their responsibilities
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