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GOOD GOVERNANCE & SOCIAL RESPONSIBILITY ASYNCHRONOUS

`Professor: Mr. Christian J. Umlas, Mba.,
(08/30/23)
Corp.Gov. Activity #1
BSBA - 1A

David, Alexander D.
Joven, Anne Shelly L.
Morante, Nadine T.
Silagan, Christian C.
Verdin, Mekaella Gayle O.

FORMULATED QUESTIONS:
1. How would you define corporate governance and its role in guiding the direction and control of
companies?

Corporate governance is the system of rules, practices, and processes by which a company is directed
and controlled. It is the framework within which the board of directors, management, and shareholders
interact to ensure the company's long-term success. It plays a critical role in guiding the direction and
control of companies. It helps to ensure that the company is managed in the best interests of all
stakeholders, including shareholders, employees, customers, and the community. Good corporate
governance can help to improve a company's financial performance, reduce its risk of corruption, and
increase its attractiveness to investors.

2. What responsibilities do boards of directors hold within the corporate governance framework, and
how do they contribute to effective company management?
They are the ones who initiate the corporate vision, mission, and purpose. They are responsible for
advising the executives in their planning and decision-making. And also to monitor the necessary
changes, responsible for supplying proper financial oversight. The Board of Directors contributes to
defining objectives, establishing major goals, and staying focused on its directions. They also contribute
to overseeing and advising a company so that it functions as effectively as possible.

3. In what ways do shareholders participate in corporate governance, and what key decisions do they
make regarding the appointment of directors and auditors?
They are the ones who have the biggest role in corporate governance because shareholders are the
owners of the company or have the right to approve corporate actions and also to vote for the directors.
They have official access to all information of the company, to join in meetings, and to propose any
commitment. The key to making decisions is that they are responsible for voting wisely for the best
interest of the company. They should spend more time reading annual reports and other information
given by the company to make smart decisions.

4. Could you elaborate on the board's role in strategic planning, leadership execution, business
management oversight, and reporting to shareholders within the corporate governance structure?
The board of directors is responsible for setting the company's strategic direction, overseeing
management's performance, monitoring the company's risk exposure, and reporting to shareholders on
the company's performance.
In strategic planning, the board works with management to develop a strategic plan that outlines how
the company will achieve its goals. The board reviews the strategic plan regularly to ensure that it is still
relevant and achievable. In leadership execution, the board ensures that management is following the
company's strategic direction and that it is managing the company's resources effectively. The board also
provides guidance and support to management. In business management oversight, the board monitors
the company's risk exposure and ensures that the company has adequate controls in place to mitigate
risks. The board also ensures that the company complies with all applicable laws and regulations.
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❖ Therefore expound in 4 to 7 brief sentences about Corporate Governance in the context

of the following:

1. Leadership: How does corporate governance influence leadership within

organizations, particularly in terms of shaping strategic direction, ensuring
effective decision-making, and fostering accountability among leadership
members?

Corporate governance makes sure that the business has proper

decision-making steps to ensure the efficacy of each strategy. The strategic
direction makes all the objectives and goals attainable. These
decision-making steps are also vital in keeping the business on track and
preventing future challenges that may arise. It also establishes a conducive
environment where leadership is honed by fostering accountability by all
stakeholders while improving their skills and abilities.

2. Effectiveness/capability: How does corporate governance impact the

effectiveness and capability of organizations, specifically in terms of
optimizing resource allocation, enhancing operational efficiency, and
fostering a culture of transparency and accountability?

Corporate governance can greatly impact the effectiveness and capability of

an organization through resource allocation where identifying the
availability of resources is done and needed to be strategically allotted to
perform different activities. Operational efficiency is gained through getting
rid of wasteful processes and procedures. This is achieved by providing
attention to the utilization, inventory, and distribution of resources.
Practicing a culture of transparency and accountability can increase the
effectiveness and capability of oneself by establishing a presumption that
employees are responsible for their practices, performance, and choices.

3. Accountability/transparency: How does corporate governance contribute to

accountability and transparency within organizations, particularly in terms of
ensuring accurate financial reporting, ethical decision-making, and providing
stakeholders with reliable information about the company's performance
and practices?

Workplace transparency is the practice of sharing information freely to

benefit the organization and its stakeholders. Meanwhile, accountability and
transparency both contribute to a company’s overall performance
improvement. Having these traits in an organization means that its
employees are held responsible for their actions, behaviors, performance,
and in making decisions. Being accountable in working with the company’s
financial statements is also essential to maintain its integrity and accuracy.
Furthermore, at every level of an organization, accountability, ownership,
and clarity of job responsibilities and duties should be established. Any
business, regardless of industry, must value its employees and consider their
feedback. Businesses that value openness and accountability encourage
their staff to provide feedback on important topics and offer secure spaces
for discussion, debate, and even anonymous sharing of concerns. By clearing
up misunderstandings within the company, they can create a corporate
culture and governance structure that promotes everyone's growth,
innovation, self-improvement, and personal development.

4. Relations with shareholders: How does corporate governance influence and

define the relationships between companies and their shareholders?
Specifically, how do governance practices impact shareholder
communication, representation, and the alignment of interests between
management and shareholders?

The relationship between a company and its shareholders has a great impact
on how well the company will perform. Shareholders take the risk of
investing their savings or capital in a company or entity. Then, the capital
was used by the business to fund its operations. This allows both parties to
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grow. The practice of good governance creates transparent rules and

regulations that enable the interests of shareholders, directors,
management, and employees all aligned. Implementing these practices can
increase the efficiency of the company’s operations, increase capital access,
reduce risk, and protect against poor management.

5. Sustainability : How does corporate governance play a role in promoting

sustainability within organizations? Specifically, how do governance
frameworks influence the integration of environmental, social, and
governance (ESG) considerations, ethical practices, and long-term
sustainability goals into company strategies and operations?

Businesses and enterprises do actually benefit from and get advantages

from their actions as more discover new ways to undertake conservation
efforts. Corporate governance helps organizations become more sustainable
in that they need the public's trust in the corporate leaders for it to have
best practices and an end with success. For businesses to have successful
sustainability plans, they must specifically be held accountable for all of their
actions, especially their social responsibilities. Additionally, because
businesses are among the biggest consumers of natural resources, they have
to preserve our planet to maintain the integrity of their operations. Given
this, businesses work very hard to include sustainability in their outlook so
that the stakeholders are delighted by their creative resource-saving
methods.

6. If the concept of corporate social responsibility (CSR) should cover the

current economic, legal, ethical, and discretionary demands society has on
organizations. Then how does corporate governance play a role in guiding
businesses to fulfill their social responsibility obligations, encompassing
economic, legal, ethical, and discretionary expectations set by society?
Specifically, how do governance mechanisms ensure that organizations
address these multifaceted societal expectations while upholding ethical
standards and contributing to positive social impact?
The sheer idea that engaging in CSR ought to serve its stakeholders speaks
volumes. Companies make sure that their employees exhibit elation and
morale at work so that they can expand their businesses and give back to
society by taking on these obligations. These governance procedures ensure
that they are conducting themselves fairly and ethically. One thing is
certain: CSR is voluntary and driven by the market, forcing businesses to
strive for the highest standards of ethical behavior despite the pressure from
society's demands for answers. To put it another way, corporate governance
would see this as an opportunity to utilize moral adherence to serve the
needs of society.
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