Bachelor of Science in Accountancy Prof. Ernie Bhong Radin, MBA
1. What is Corporate Governance?
- refers to the system by which corporations are directed and controlled. - The framework of rules and practices by which a board of directors ensures accountability, fairness and transparency in a companys relationship with its all stakeholders.
2. What are the principles of Corporate Governance?
2.1 Lay solid foundations for management and oversight-recognize and publish the respective roles and responsibilities of Board and management. 2.2 Structure the Board to add value-Have a Board of effective composition, size and commitment to adequately discharge its responsibilities and duties. 2.3 Promote ethical and responsible decision-making-Actively promote ethical and responsible decision-making 2.4 Safeguard integrity in financial reporting-Have a structure to independently verify and safeguard the integrity of the Company's financial reporting 2.5 Make timely and balanced disclosure-Promote timely and balanced disclosure of all material matters concerning the Company.
3. What are the advantages and disadvantages of Corporate Governance?
Advantages:
1. Enhanced Performance- corporate governance helps a company improve overall performance. 2. Access to Capital- the better corporate governance a company has the more easily it can access outside capital that the business can use to fund its projects.
Disadvantages:
1. Family-Owned Companies-Corporate governance works at its best when shareholders and board members are able to make objective decisions that are in the best interest of the company. 2. Easily Corruptible- Corporate governance needs a certain level of government oversight to avoid increasing levels of corruption.
.
ANDAYA, JENNIFER M. FEBRUARY 17, 2014 Bachelor of Science in Accountancy Prof. Ernie Bhong Radin, MBA
1. What is Corporate Governance?
The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company.
2. What are the principles of Corporate Governance?
- Respect the rights of shareholders-Respect the rights of shareholders and facilitate the effective exercise of those rights - Recognize and Manage risk-Establish a sound system of risk oversight and management and internal control - Encourage enhanced performance- Fairly review and actively encourage enhanced Board and management effectiveness - Remunerate fairly and responsibly-Ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to corporate and individual performance is defined - Recognize the legitimate interests of stakeholders -recognize legal and other obligations to all legitimate stakeholders.
3. What are the advantages and disadvantages of Corporate Governance?
Advantages:
- Enhanced Performance- corporate governance helps a company improve overall performance. - Access to Capital- the better corporate governance a company has the more easily it can access outside capital that the business can use to fund its projects.
Disadvantages:
- Family-Owned Companies-Corporate governance works at its best when shareholders and board members are able to make objective decisions that are in the best interest of the company. - Easily Corruptible- Corporate governance needs a certain level of government oversight to avoid increasing levels of corruption.