The Importance Of Corporate Governance Of Diageo

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It is well known that corporate governance has been defined as “the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies, including setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship.” (Financial Reporting Council, UK Corporate Governance Code)

Leadership and Board Effectiveness
According to the recent annual report, Diageo has been in compliance with The UK Corporate Governance Code which was published by the Financial Reporting Council in September 2014 until 30 June 2016. In this year, Diageo has 13 board members in total and 5 of them are women. Moreover, the number of over 60 year-old board members are 6, and there also have 2 board members’ age under 50 year-old. It is shown experience, educational and cultural diversities in boardroom in some degree, although except one Asian board members, they all comes from Europe, America or Australia.
There are 9 non-executive directors in Diageo and one senior non-executive director. It should be noticed that all non-executive directors are
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The audit committee review the external audit strategy yearly, and they also have an external auditor who will give his opinion about how the company have operated and if there has any place the company should pay attention in the future. By the way, the external auditor does not have any contractual obligation to the company’s current choice (Diageo Annual Report 2016 Interactive). Depending on these suggestion, the audit committee will submit a report to board to help boardroom making

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