Dealing with Corporate Governance and Accountability Predicaments. Nelson Nyoro Co-operative practitioner and Scholar Uphold public interest

Objectives of the discussion Definition of corporate governance Identify the pillars of corporate governance Review of theories and implications Pay-offs of good governance Simulations

Audit bridges information asymmetry Risk comes from not knowing what you are doing Warren Buffet

Definition of Corporate Governance I The acceptable interrelationships between the Board, the shareholders, employees and other stakeholders in pursuit of pre-stated goals.

Review of theories Agency theory (The agent may be succumbed to self-interest, opportunistic behavior and falling short of congruence between the aspirations of the principal and the agent’s pursuits). Political theory Captive theory Broken window theory Steward theory

Co-op Principles and corporate governance Voluntary and open membership; ( Win the market and retain) Democratic member control; Economic participation by members; Autonomy and independence; ( Less of Govt)

Co-op Principles and corporate governance Voluntary and open membership; ( Win the market and retain) Democratic member control; ( Political theory and Captive Theory) Economic participation by members; Autonomy and independence; ( Less of Government)

Co-op Principles and corporate governance Education, training and information; ( Efficient market hypothesis) Co-operation among co-operatives Concern for community in general ( Corporate citizenship)

Definition of Corporate Governance II The processes, policies/ Procedures, structures, actions employed by a Board to oversee and monitor an organization so that it can achieve it`s objectives.

Parties to corporate governance Bankers/Lenders shareholders Employees Governance Govt Competitors Customers

Pillars of corporate governance Legal framework leadership Internal controls Governance stewardship Accountability Authority

What does it benefit an organization? Corporate Governance is central to the a Firm’s approach toward the enhancement of shareholder value.