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the process and structure..to direct and manage the business and affairs of the corporation with the objective of enhancing shareholder value, which includes ensuring the financial viability of the business.
System Objectives of the company Good corporate governance structures Accountability and control systems
Key objectives
Role of owners in electing the Board Protection of minorities
Corporate
Shareholders
Stakeholders
Creditors
If managers pursue only their personal interests, and ignore shareholders interest, stock prices may decrease. This make the company a target for takeover. To avoid the possibility of a takeover, the management would work in the interest of shareholders. Market forces, such as the possibility of takeover, may work as corporate governance mechanisms.
One way to align the interest of management and of shareholders is to tie managerial compensation to the firm performance. Increasing salary with firm performance, and the provision of stock option compensation
statements
circumstances
principal stockholders
Annual report
protections
Attorneys
directors
committees consisting of independent directors only Corporate Governance Committee Compensation Committee Audit Committee
governance guidelines Qualification standards Responsibilities Access to management Compensation Management succession Annual performance evaluation Business Conduct and Ethics violations
Listed companies to compulsorily adopt a Code of CEO to certify annually that no listing agreement
Ownership pattern
Board size
of companies have a board majority of independent directors have less than 1/3rd of their directors independent
12%
Executive directors in board Chairman and CEO Lead independent director Board committees
In 35 companies 50% of the directors or more are executive directors 60% have separate Chairman and CEO 3 companies have lead independent directors companies have audit committees 54% have fully independent Audit Committees
All
Boards of 49 companies out of 50 have less than 25% executive directors Only 20% have separate Chairman and CEO 20 companies have lead independent directors
All
companies have remuneration committees of these 14 fully independent and 16 have majority independent committees
33
companies have nomination committees 6 are fully independent and 3 have majority independent committees
9