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Introduction To Corporate Governance

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Angelica Tan
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23 views3 pages

Introduction To Corporate Governance

Uploaded by

Angelica Tan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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INTRODUCTION TO CORPORATE GOVERNANCE

GOVERNANCE
● Refers to a process whereby elements in society wield power, authority, and influence to enact policies
and decisions concerning public life and social upliftment

● Means the process of decision making and the process by which decisions are implemented through the
exercise of power and authority by leaders of the country

CORPORATE GOVERNANCE
● Is the system of rules, practices and processes by which a company is directed and controlled.

● It identifies
➢ Who has power
➢ Who is accountable
➢ Who makes decisions

● Corporate governance ensures that businesses have appropriate decision-making processes and controls
in place so that the interests of all stakeholders (shareholders, employees, suppliers, customers and the
community) are balanced.

CHARACTERISTICS OF GOOD GOVERNANCE

● Participation
● Rule of Law
● Transparency
● Responsiveness
● Consensus oriented
● Accountability
● Effectiveness & Efficiency
● Equity & Inclusiveness

OBJECTIVES OF CORPORATE GOVERNANCE

1. transparency and full disclosure


2. Accountability
3. equitable treatment of shareholders
4. self evaluation
5. increasing shareholders' wealth
PARTIES INVOLVED IN CORPORATE GOVERNANCE

1. SHAREHOLDERS
➔ Provide effective oversight through election of board members and approval of major activities

2. BOARD OF DIRECTORS
➔ Major representative of shareholders to ensure that the organization is run according to
organization’s charter and that their is properly placed accountability

3. NON-EXECUTIVE OR INDEPENDENT DIRECTORS


➔ Same with BOD

4. MANAGEMENT
➔ Operations and Accountability. Manage the organization effectively.

5. AUDIT COMMITTEE OF THE BOD


➔ Provide oversight of internal and external audit function and the processes of preparing the
annual financial statements as well as public reports on internal control

6. REGULATORS
a. Board of Accounting (BOA) - set auditing and accounting standards

b. Securities and Exchange Commission (SEC) - ensure the accuracy, timeliness, and fairness of
public and financial reporting and other information for public companies

7. EXTERNAL AUDITORS
➔ Perform the audit of company financial statements to ensure that the statements are free from
material misstatements

8. INTERNAL AUDITORS
➔ Performs audit of companies for compliance with company policies and laws, audits to evaluate the
efficiency of operations, and periodic evaluation and test of controls.

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