definition governance corporate body companies public sector social sector
TRANSCRIPT
![Page 1: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/1.jpg)
![Page 2: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/2.jpg)
Definition
Governance Corporate Body
CompaniesPublic SectorSocial Sector
![Page 3: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/3.jpg)
Important Issues
Accountability Stakeholders Transparency Governance/ Board Structures Monitoring Performance
![Page 4: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/4.jpg)
CG in Public Sector
Seven Principles of Public Life Selflessness Integrity Objectivity Accountability Openness Honesty Leadership
![Page 5: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/5.jpg)
Dominant Personality Aspect Principal cause of CG issues Characteristics of a dominant leader
CharismaticPowerfulIntolerantOften seemingly sincereDoes not nurture subordinates
![Page 6: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/6.jpg)
Stakeholders
Board of Directors elected by shareholders Controlling (Majority / Minority)Non-controlling (individual / institutional)
Lenders (individual / institutional) Management / Employees Clients / Suppliers Society (includes government)
![Page 7: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/7.jpg)
Key Persons Mr Shareholder
Individual / Institutional Investor Chairman Board Members
Executive / Non-executiveIndependent / Nominees
CEO Other Managers / Employees
![Page 8: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/8.jpg)
Agency Problem
Minority Controller Majority Controller Cost of agency monitoring
![Page 9: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/9.jpg)
Key Issues of CG Financial Reporting and Auditing Directors Remuneration Risk Taking Effective Communication between:
Board and shareholdersCompany and stakeholders
Corporate Social Responsibility
![Page 10: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/10.jpg)
Financial Reporting Force of Law Influence of professional bodies Audit Report – how valid is it? Does it work? Role of Institutional Investor
Professional analysts What is the real solution?
![Page 11: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/11.jpg)
Directors Remuneration
Big issue in West, not here Who sets it? Why do shareholders complain after
approving? Disunity in shareholders?
![Page 12: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/12.jpg)
Company-Stakeholders Relations Structure of the Board
Is it representative?Does it have sufficient Independents?
Articles of Association Contents?Allocation of power to stakeholdersActual use of powers
![Page 13: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/13.jpg)
Risk Management WHO CARES:
To take risk or not to take risk?How much risk to take?How to minimize / manage risks?
NATURE OF RISKSOperationalTakeovers
![Page 14: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/14.jpg)
Communication
What needs to be communicated? Frequency Set pattern, or need basis Why communicate?
![Page 15: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/15.jpg)
Legislation for CG
Company Law Regulations for listed companies Specific CG related laws? Social pressure can often have the
same force as law.
![Page 16: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/16.jpg)
Questions asked when companies fail
Was it management incompetence?Why was it not noticed before disaster?
DishonestyDid the dishonest person get away with it?How?Why?
Eventually, this boils down to poor governance.
![Page 17: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/17.jpg)
Approaches to CG
Shareholder Value approach Enlightened Shareholder Approach Pluralist Approach Ethical conduct and Code of ethics in
CG
Assignment of this week
![Page 18: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/18.jpg)
Shareholders Approach Board cares for only shareholders Shareholder means:
All shareholders, orMajority shareholders only, orVocal shareholders only?
Balanced treatmentBetween shareholders and others
![Page 19: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/19.jpg)
Enlightened ShareholdersApproach Balance between the interest of all
stakeholders, but basic attention to shareholders.
Issues:Which shareholdersPeople who wear two or more caps
![Page 20: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/20.jpg)
Integrated/Pluralist Approach Accountability
To shareholders, but also to others
ResponsibilityTo all stakeholders.
Means of enforcement
![Page 21: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/21.jpg)
The Corporate Sins
Sloth (unwillingness to take risk/initiative)
Greed Fear
![Page 22: Definition Governance Corporate Body Companies Public Sector Social Sector](https://reader036.vdocuments.us/reader036/viewer/2022081516/551b6f1b550346d6338b4d4e/html5/thumbnails/22.jpg)
What is the Best Approach? Which Why Where