Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
to Corporate
Governance
What is it about?
Corporate
Governance
Company
What is a company?
Characteristics of a Company
Types of Companies
Characteristics of a Company
Ownership in shares
Freely transferable shares
Separate entity apart from shareholders
Liability of shareholders
Indefinite life
Board of directors
Types of Companies
Limited or Unlimited
Limited by shares or by guarantee
Private or Public
Listed or Unlisted
Hierarchy of a Company
Shareholders
Board of Directors
Management
Appointed by and reporting to directors
Includes executive directors
Top Players
Directors
Senior Managers:
Classification of Stakeholders
Owners
Lenders
Employees
Business Associates
Society
Includes government
Opportunity to protect
individual interests
Classification of Stakeholders
Classified on
basis of Role
in the Company
Those with
Full Opportunity
Those with a
Partial Opportunity
Those with
Virtually No opportunity
Owners
Controlling
Shareholders
Institutional Investors
with Board representation
Lenders
Financial institutions
with elaborate lending
Contracts
Other lenders
Employees
Executive Directors
Senior Managers
Other employees
on regular or
contract terms
Business Associates
Smaller suppliers
and smaller clients
Government
Public at large
Society
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Definition
Corporate governance refers to the mechanism
used to control and direct the affairs of a
corporate body
in order to serve and protect
the individual and collective interests
of all stakeholders.
(Dr Safdar A Butt)
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Function
Management
Approval of Plans
Planning
Preparation of plans
Providing overall
leadership
Leading
Arranging
resources
Organizing
Controlling managers
Controlling
Controlling
employees
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Governance
Strategic
Setting Objectives
Devising plans to achieve these objectives
Setting rules or parameters
Not directly concerned with routine affairs
Protection of Interests of all stakeholders
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Management
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Approaches to
Corporate Governance
Shareholders Approach
Stakeholders Approach
Enlightened Shareholders Approach
Which approach is best?
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Corporate Sins
Sloth
Greed
Fear
Agency Theory
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Key Issues
Financial reporting
Directors remuneration
Risk management
Effective communication
Corporate Social Responsibility
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Financial Reporting
Accuracy
Reliability
Comprehensiveness
Timeliness
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Remuneration
Powers
Balance between:
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Risk Management
Risk profile
What risks to take?
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Communication
Transparency
Regular communication
With who?
In what format?
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Corporate Social
Responsibility
Business Ethics
Being a good citizen
Doing business responsibly
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Why is CG Important?
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Thank you
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