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12 Cards in this Set
- Front
- Back
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What is Cadbury definition of corporate governance? |
System by which companies are directed and controlled. |
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What is the link between risk management and corporate governance? |
Board of directors must be satisfied that the risk within the org is efficiently managed. Risk mgmt acts as an early warning system to facilitate tge board taking action when necessary. |
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What are the 5 general principles to support best decisions? |
Integrity Fairness Judgement Independence Scepticism |
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What are the 5 general principles that support honest disclosures? |
Transparency Probity Responsibility Accountability Innovation |
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Reputation is a general principles. What does it mean? |
Others’ perceptions of expectations. Valuable long term asset. |
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What are two different approaches to Corp Gov |
Principles based Rules based |
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Features, benefits, disadvantages, examples of principles based approach |
Sets out broad approach, comply or explain, allows investors to decide if they should depart from code. + greater flexibility, across diff legal jurisdictions so good for multi nats, forces boards and shareholders to think about gov - ve broad so not a guide to best practice, investors cannot be confident, viewed as voluntary Ukcg 2018
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Features, benefits, disadvantages of rules based approach |
Orgs comply with detailed rigid code No non compliance Investors rely on 3rd party + unambiguous evidenced, consistent minimum standards -ve no leeway even if illogical, enforcement difficult for situations which are not covered Example, USA Sorbonne’s-Oxley Act (2002) |
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Governance principles of OECD |
1.Ensuring basis for effective CG 2. Right and equitable treatment of shareholders 3. Investors and intermediaries 4. Stakeholders 5 Disclosure and transparency 6.Responsibilities of the board |
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Limitations of international code |
Assume a one size fits all Guidance only Different legislative approaches Difference in preferences: eg rules v principles Lowest common denominator |
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8 responsibilities of the chair of the board |
Leadership to the board Ensures provision of accurate timely info to the board Effective comms to shareholders Effective contribution from NEDs, constructive relations between NEDs and Execs. Lead in providing induction for board Meet with NEDs without exec Facilitate board appraisal Encourage active engagement |
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8 Responsibilities of CEO |
Leadership of the business Provide accurate and timely info Communicate with stakeholders Facilitate implementation of board decisions Cooperate in induction and development Cooperate with chair so they can meet with NEDs Cooperate in board appraisal Cooperate with all members of the board |
