CORPORATEGOVERNANCE

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CORPORATE GOVERNANCE

WHAT IS CORPORATE GOVERNANCE? : 

WHAT IS CORPORATE GOVERNANCE? The system by which companies are directed and controlled. Corporate governance is the relationship among various participants [CEO, Management, Shareholders, Employees ] in determining the direction and performance of corporation.

DEFINITION : 

DEFINITION Corporate governance is the relationship between corporate managers ,directors and provider of equity people and institutions who save and invest their capital to earn a return .It ensures that the board of directors Is accountable for the pursuit of corporate objectives and that the corporation itself conforms to the law and regulations. ----- International chamber of commerce

What is impact of corporate governance ? : 

What is impact of corporate governance ? Strengthened economy. Tool for socio-economic development. Tool for sustainable development.

What is the role of investors ? : 

What is the role of investors ? To help the company in raising finance or capital in dividend policies. In selection of Board Of Directors. Deciding dividends policies.

Parties to corporate governance : 

Parties to corporate governance

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parties involve in corporate governance include the CEO, the Board of directors, Management and share holders. Other stakeholders who take part include suppliers, employees, creditors, customers and the community at large.

All parties to corporate governance have an interest : 

All parties to corporate governance have an interest Directors , management and workers receive salaries, benefits and reputation. Shareholders receive capital return. Customers receive goods and services. Suppliers receive compensation for their goods and services.

Principles of corporate governance : 

Principles of corporate governance Rights and equitable treatment of shareholders Interests of other stakeholders Role and responsibilities of the board Integrity and ethical behaviour Disclosure and Transparency

Mechanisms and Controls : 

Mechanisms and Controls Internal corporate governance controls Monitoring by the board of directing Remuneration External corporate governance control Competition Debt covenants Government regulation Media pressure Takeover

Systemic problem of corporate governance : 

Systemic problem of corporate governance Demand for information Monitoring Costs Supply of accounting information

Role of accountant : 

Role of accountant Financial Accounting Book keeping

REGULATION : 

REGULATION An authoritative role “A PRINCIPLE OR CONDITION THAT CUSTOMARILY GOVERNS BEHAVIOUR.” Rules verses principals Enforcement Action beyond obligation

Role of Regulator : 

Role of Regulator To protect To enable + Out come in Public interest = Protect and enable; Means to regulate in a way that seeks to Protect against the negative impact and enable system to grow.

WHAT DOES ENABLING ENTAIL ? : 

WHAT DOES ENABLING ENTAIL ? Process Sence Focus on result and cost effectiveness Establishing common information regulatory requirements Coordinate among /between agencies and department Publish service standard and agreement Eliminate duplicative function

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Regulatory policies Facilitate the long term efficiency of market Provide information and choice to all market participant Attention towards public interest Facilitate to development with in approved terms and condition Continue to development of goal oriented regulation

Introducing the player and driver : 

Introducing the player and driver Industry Public Regulators Result Clarity Timeliness Efficiency Long term stability Market choices Involvement Worth of Product/ Service Mandate driven Fairness Differing processes Risk averse Safaty Right respected Goal Oriented

Maintaining respect for regulatory process and decision : 

Maintaining respect for regulatory process and decision Regulators must maintain their independence, Impartiality and fairness Stake holder must feel they are engaged, their interest understood and that they influence outcome

Corporate governance models around the world : 

Corporate governance models around the world Anglo American model USA’s approach to governance issues UK’s approach to governance issues Non Anglo American model

Codes and guidelines : 

Codes and guidelines Governance disclosure Auditing Board and management structure & process Corporate responsibilities and information disclosure Financial transparency and information disclosure Ownership structure and exercise of control rights