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Corp Governance

Corporate governance is defined as the system of rules and practices by which corporations are directed and controlled, balancing the interests of various stakeholders. Key characteristics of good governance include participation, rule of law, transparency, responsiveness, consensus orientation, equity, effectiveness, efficiency, and accountability. Effective corporate governance principles focus on transparency, accountability, and corporate control to ensure sustainable growth and responsible decision-making.

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3 views

Corp Governance

Corporate governance is defined as the system of rules and practices by which corporations are directed and controlled, balancing the interests of various stakeholders. Key characteristics of good governance include participation, rule of law, transparency, responsiveness, consensus orientation, equity, effectiveness, efficiency, and accountability. Effective corporate governance principles focus on transparency, accountability, and corporate control to ensure sustainable growth and responsible decision-making.

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hwhwhwhjiii
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We take content rights seriously. If you suspect this is your content, claim it here.
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CORPORATE GOVERNANCE, BUSINESS ETHICS, RISK MANAGEMENT AND INTERNAL CONTROL

MODULE 1
Read Chapter 1 – Introduction to Corporate Governance
Prescribed textbook / physical book: Corporate Governance, Business Ethics, Risk management
and Internal Control By: Ma. Elenita Balatbat Cabrera and Gilbert Anthony B. Cabrera 2019-2020
Edition

INTRODUCTION TO CORPORATE GOVERNANCE

Corporate Governance – is defined as the system of rules, practices and processes by which
business corporations are directed and controlled. It involves balancing the interest of a
company’s stakeholders such as shareholders, management, customers, suppliers, financiers,
government and the community.

Characteristics of Good Governance


1.Participation – participation needs to be informed and organized. Participation by both men
and women is a cornerstone of good governance.

2.Rule of law - it requires fair legal frameworks that are enforce impartially.

3.Transparency – it means that information is available and accessible to those who will be
affected by the decisions taken by the board.

4.Responsiveness – good governance requires that institutions and processes try to serve the
needs of all stakeholders.

5.Consensus Oriented – it requires a broad consensus on what is in the best interest of the
whole community and how this can be achieved.

6.Equity and Inclusiveness – it ensures that all its corporate members feel that they have a stake
in the business and maintain their well-being.

7.Effectiveness and Efficiency – Good governance means that processes and institutions
produce results that meet the needs of the society. Efficiency means use of natural resources
and the protection of the environment.

8.Accountability- It cannot be enforced without transparency and the rule of law. An


organization or an institution is accountable to those who will be affected by its decisions or
actions.

Principles of Effective Corporate Governance Positive answers to the following questions


indicate a firm’s compliance with the basic principles of good corporate governance.
A. Transparency and Full Disclosure -Does the board of directors telling what is going on in the
business? -Does the board of directors meet the information needs of investment communities?
-Does it safeguard integrity in financial reporting?

B. Accountability -Does the board of directors promote objective, ethical and responsible
decision making? -Does the composition mix of board membership ensure an appropriate mix
of expertise, diversity and knowledge?

C. Corporate Control -Does the board of directors built long-term sustainable growth in
shareholder’s value for the corporation? -Does it create an environment to take risk? -Does it
recognize and manage risk?

ASSIGNMENT:
Explain whether the following statement is True or False.
1. “Governance is exercised only by the government of a country”
2. Transparency and Accountability are synonymous or the same.

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