Corporate Governance. Course Objectives Explain What is Corporate GovernanceDefine Corporate GovernanceExplain What is a CorporationDescribe the Features.

Slides:



Advertisements
Similar presentations
Revisiting the Purpose of the Firm: Executive Leadership Development in the Context of Corporate Governance Reform Catherine C. Giapponi Charles F. Dolan.
Advertisements

Chapter 1 Financial Management.
What is Corporate Governance?
Accounting Principles, Ninth Edition
Code of Corporate Governance for Listed Companies in China
Corporate Governance in UAE THE COSTS OF NON-COMPLIANCE: THE BENEFITS OF CHOOSING THE RIGHT PATH Musthafa Zafeer Founder & Managing Partner Musthafa &
INDIA.
Governance Challenges in Family Owned Businesses Islamabad – 11 Feb 2015.
Business ethics chapter one
Copyright © 2010 Pearson Prentice Hall. All rights reserved. Chapter 1 Financial Management.
3rd session: Corporate Governance
Implementing and Auditing Ethics Programs
Ethics and Social Responsibility
1 Business Continuity and Compliance Working Together Kristy Justice, AVP WaMu Card Services 08/19/2008.
FINANCE IN A CANADIAN SETTING Sixth Canadian Edition Lusztig, Cleary, Schwab.
Part 1 Business in a Changing World © 2015 McGraw-Hill Education.
Accounting as a Form of Communication
Ethics and Social Responsibility McGraw-Hill/Irwin Contemporary Management, 5/e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserved.
C H A P T E R 2 Stakeholder Relationships, Social Responsibility, and Corporate Governance.
Ethics and Social Responsibility
ISO Richard Welford CSR Asia © CSR Asia 2011.
VALUE CREATION FOR ALL The Value Creating Board. The Evolution of the Board The Complacent Board- overpowered by Imperial CEO who controlled the board.
Copyright © 2011 Pearson Prentice Hall. All rights reserved. Getting Started: Principles of Finance Chapter 1.
Chapter 1 Financial Management. © 2013 Pearson Education, Inc. All rights reserved Describe the cycle of money, the participants in the cycle, and.
Chapter 7 Corporate Governance.
OECD Guidelines on Insurer Governance
Developing an Effective Ethics Program.  The responsibility of the corporation as a moral agent  The need for organizational ethics programs  An effective.
The Corporation and Public Policy: Expanding Responsibilities
East Asia and the Pacific Region
Copyright 2004 Prentice Hall1 Inside Stakeholders  Shareholders – the owners of the organization  Managers – the employees who are responsible for coordinating.
ETHICAL UNETHICAL Ethical Leadership.
Copyright © Houghton Mifflin Company. All rights reserved.1-1 Chapter 1 The Importance of Business Ethics.
© 2013 Cengage Learning. All Rights Reserved. 1 Part Four: Implementing Business Ethics in a Global Economy Chapter 9: Managing and Controlling Ethics.
Version: 2.0 © University of Tasmania All rights reserved. CRICOS Provider Code: 00586B Accounting & Financial Decision Making BFA103BFA103.
Implementing and Auditing Ethics Programs
1-1Copyright © Houghton Mifflin Company Business Ethics Ethical Decision Making and Cases 4 th Edition Ferrell, Fraedrich, Ferrell Yousef Y. Alyazji (MBA)
Marketing Ethics and Social Responsibility
CORPORATE GOVERNANCE AND STRATEGIC ANAGEMENT.  Corporate governance, refers to how an organization is governed.  It ensures effective interaction among.
Chapter 1 An Overview of Business Ethics. 1-2 Why differentiate between rules/policies/law & ethics? the difference between an ordinary decision & an.
Part A – SOCIAL & CULTURAL SUSTAINABILITY AS (3.2): Demonstrate understanding of strategic response to external factors by a business that operates.
Copyright © 2009 Pearson Prentice Hall. All rights reserved. Chapter 1 The Role and Environment of Managerial Finance.
WEEK 7 ETHICS & SOCIAL RESPONSIBILITY Özge Can –
Regulatory Institutions in Turkey. Regulatory Institutions Central Bank of Turkey Banking Supervision and Regulatory Institutions Capital Markets Board.
C H A P T E R 2 Stakeholder Relationships, Social Responsibility, and Corporate Governance.
Ethics in Business Case studies, Theory, and Application.
Corporate Governance. CORPORATE GOVERNANCE  WHAT IS CORPORATE GOVERNANCE – PROCESSES AND STRUCTURE BY WHICH BUSINESS AND AFFAIRS OF CORPORATE SECTOR.
WEEK 1- MGM4136 PREPARED BY PUAN HAMIMAH (TO BE USED AS GUIDELINES AS STUDENT PREPARING THEIR SPECIFIC TOPIC FOR THE ASSIGNMENT.
Clause 49 Anubhav lamba A.C.S, LL.B. It’s an economic activity related to:- (a) Trade (b) Commerce (c) Manufacturing (d) Services For profit.
McGraw-Hill/Irwin© 2006 The McGraw-Hill Companies, Inc. All rights reserved. 4-1 The Nature of Ethics Ethics – The inner-guiding moral principles, values,
Part Two: The Culture of Management Chapter 3: Managing Social Responsibility and Ethics Chapter 4: Managing Employee Diversity Chapter 5: Managing Organizational.
CORPORATE GOVERNANCE Corporate Governance. What is Corporate Governance ? Corporate Governance refers to the structures & processes for the efficient.
Chapter One Overview of Managerial Finance Principles of Managerial Finance.
Chapter 7 Theories of Social Responsibility, The Corporate Social Audit and Corporate Sustainability.
Business Ethics Chapter 3 0. Business Ethics “doing well by doing good” 1.
A2 Unit 6 External Influences. Objectives To introduce the new module and its contents Students should understand the concept of social responsibility.
Chapter 7 Corporate Governance. Definition of Corporate governance “Corporate governance involves a set of relationships between a company’s management,
Governance, Risk and Ethics. 2 Section A: Governance and responsibility Section B: Internal control and review Section C: Identifying and assessing risk.
Corporate Governance Week 10 BUSN9229D Saib Dianati.
The Importance of Business Ethics C H A P T E R 1 Ethical Decision Making For Business 8e Fraedrich/Ferrell/Ferrell CHAPTER 1.
F Designed to give you knowledge and application of: Section A: Business organisational structure, governance & management A1. The business organisation.
CAPACITY BUILDING PROGRAMME ON BOARD INDUCTION AND EVALUATION
OECD - Introduction It is an organisation of those countries which describe themselves as Democratic and have Market economy. Its HQ is in Paris, France.
The Importance of Business Ethics
Grievance, Discipline & Dismissal
Corporate Governance It is a system by which companies are managed and directed in the best interests of the owners and shareholders. It refers to the.
Chapter 8 Developing an Effective Ethics Program
Business Ethics and the Legal Environment of Business
Chapter 7 Corporate Governance.
An overview of Internal Controls Structure & Mechanism
Presentation transcript:

Corporate Governance

Course Objectives Explain What is Corporate GovernanceDefine Corporate GovernanceExplain What is a CorporationDescribe the Features of a CorporationExplain What is Good Corporate GovernanceExplain the Sarbanes Oxley ActDescribe the Role of Government in Corporate GovernanceDescribe the World Bank Directives for Corporate GovernanceExplain the Factors Directing Corporate BehaviorDescribe the Emerging Best Practices of Corporate GovernanceExplain What is Corporate Social ResponsibilityExplain the Role of Board of Directors in Corporate GovernanceDescribe the Benefits of Corporate GovernanceList the Principles of Corporate GovernanceList the Rules of Corporate Governance

Introduction Look at the news that made headlines in all the leading newspapers across the world. Let us see what really happened.

Introduction Satyam Computers is a reputed software firm of India with around 185 Fortune 500 companies as customers and operations in 66 countries. Satyam Computers had on December 16, 2008 announced that it will acquire two group firms: Maytas Properties Maytas Infra

Introduction The Board of Directors of Satyam had approved the founder, Byrraju Ramalinga Raju's proposal to buy 51% stake in Maytas Infra and 100% in Maytas Properties. The total outflow for both the acquisitions were expected to be US$ 1.6bn comprising of US$ 1.3 bn for 100% stake in Maytas Properties and US$ 0.3 bn for 51% stake in Maytas Infra.

Introduction This is the point that sparked a row over alleged violation of corporate governance laws. The deal was not profitable to the investors. Hence, after this announcement, the investors started raising a hue and cry. The promoters decided to inflate the revenue and profit figures of Satyam. Hence, the company had a huge gap in its balance sheet.

Introduction So, Satyam Computers Services Ltd. got involved in a multimillion dollar accounting fraud which ultimately led to a huge face loss for the entire Indian IT industry. The involvement of the reputed external agency like Price Waterhouse Coopers (PWC) in the scandal made the entire episode a nightmare for the regulatory bodies, the government and the employees of the organization.

Introduction Therefore, it is very critical that every corporate should follow the norms of good corporate governance. The objective of corporate governance is the prevention of such scams in businesses which have a huge bearing not only on the immediate shareholders but also on the morale of the larger stakeholder groups.

Introduction Let us learn about Corporate Governance in detail. Corporate Governance is basically a detailed disclosure of information and an account of an organization’s financial situation, performance, ownership and governance, relationship with shareholders and commitment to business ethics and values.

What is Corporate Governance? Corporate Governance refers to the way a corporation is governed. It is the technique by which companies are directed and managed. It means carrying the business as per the stakeholders’ desires. It is actually conducted by the board of Directors and the concerned committees for the company’s stakeholder’s benefit. It is all about balancing individual and societal goals, as well as, economic and social goals.

Corporate Governance – Definition It is interesting to note that the definition of corporate governance changes in different cultural contexts. For example: Let us look at a definition provided by the Center of European Policy Studies or CEPS. CEPS define corporate governance as: “The whole system of rights, processes and controls established internally and externally over the management of the business entity with the objective of protecting the interests of the stakeholders.”

Evolution of Corporations Let us now look at the evolution of corporations into the form we know today. To begin with, in the earlier times, the educational and religious corporations were given considerable independence and perpetual existence to evade the all encompassing power of the king. Later, corporations were set to address state’s specific needs like establishing colonies during the colonial era. Initially, corporations were characterized by a few wealthy people who negotiated amongst themselves, invested capital and worked towards maximizing profits.

What is Good Corporate Governance? Corporate Governance is the art of directing and controlling the organization by balancing the needs of the various stakeholders. This often involves resolving conflicts of interest between the various stakeholders and ensuring that the organization is managed well meaning that the processes, procedures and policies are implemented according to the principles of transparency and accountability.

Sarbanes Oxley Act Corporate Governance has been in the news for the last decade or so following a spate of scandals that engulfed companies like Enron which led to their collapse because of mismanagement. This prompted regulators all over the world to implement various acts and rules to check irresponsible corporate behavior that would mar the prospects of the corporations and cause harm to their shareholders and stakeholders. Acts like the Sarbanes Oxley Act were passed to enforce greater oversight over corporations and ensure that they did not overreach themselves in their relentless pursuit of profits. Indeed, it can be said that the Enron debacle was a wakeup call for corporate America to set its house in order.

The Role of the Government: Legislation and Regulation Another important consideration is the choice of going after the corporation or people, who have been involved in the misconduct. A rather fair and objective view of this issue, is that if the organization has a proper system of safeguards and checks in systems and processes and if the misconduct profits just one person, in this case even the corporate becomes a victim. For such situations, a single person can be accused of embezzlement and liable for prosecution. However, if the fraud is at a larger level involving more people, the situation becomes complex, whether to hold liable the board members and senior leaders for failing to ensure the prevention.

Community members want jobs which would give them a decent income or wage as well as which challenges their ingenuity and creativity. They need goods and services which are of a decent quality Expectations of the Community from the Corporate The following are the various expectations that the community has from the corporate: Community members also want their share of interest in the corporation either as an employee, shareholders, suppliers, creditors or just as neighbors. They want a safe and healthy work environment.

Impact of Corporate Behavior The corporate behavior tends to have a direct or sometimes an indirect impact on the economic state of the countries and communities they operate in. Any lack or deficiency in the corporate governance structures has a potential to threat the stability of financial structures globally. The very recent examples were the economic crisis in US, Brazil and Asia in 1998 and the ever continuing financial meltdown of the current times.

Best Practice #1 Best Practice #2 Best Practice #3 Emerging Best Practices of Corporate Governance Best Practice #1 In the wake of the crisis, several proposals aimed at introducing greater transparency and accountability from the corporate have been set in motion. These include the Dodd-Frank Act or the legislation that has been passed in the US to monitor the accounting and business practices of the banks and corporate.

Principles of Corporate Governance The following are the principles of good corporate governance: Ethical Approach - organizational image, culture, society Caring for Stakeholders – Though some have greater importance than others Balanced Objectives - Agreement of goals by all interested parties Equal Participation of Each Party - Roles of key players such as: owners/directors/staff Existence of Proper Decision-making Process – Decisions should reflect all other principles and give due importance to all stakeholders Accountability and Transparency - to all stakeholders

This is a DEMO Course On – Corporate Governance. Register Today and Get Access to 5 FREE Courses. What Do you Get: 1.View All Courses Online. 2.Download Powerpoint Presentation for Each Course. 3.Do the Knowledge Checks for Each Course. This is a DEMO Course On – Corporate Governance. Register Today and Get Access to 5 FREE Courses. What Do you Get: 1.View All Courses Online. 2.Download Powerpoint Presentation for Each Course. 3.Do the Knowledge Checks for Each Course. ManagementStudyGuide.com