Podcast
Questions and Answers
What is the primary responsibility of the Audit Committee?
What is the primary responsibility of the Audit Committee?
- To establish policies on executive remuneration
- To review the qualifications of all Board nominees
- To oversee internal controls and the Board's oversight responsibility (correct)
- To perform the annual financial audit of the corporation
Which committee is responsible for evaluating the qualifications of individuals nominated to the Board?
Which committee is responsible for evaluating the qualifications of individuals nominated to the Board?
- Audit Committee
- Executive Committee
- Compensation Committee
- Nomination Committee (correct)
What is one of the key responsibilities of the Board of Directors?
What is one of the key responsibilities of the Board of Directors?
- To determine the daily operations of the corporation
- To oversee the marketing strategies of the corporation
- To evaluate product lines for profitability
- To protect the resources entrusted by shareholders (correct)
What task does the Compensation or Remuneration Committee perform?
What task does the Compensation or Remuneration Committee perform?
Who is responsible for electing the members of the Board of Directors?
Who is responsible for electing the members of the Board of Directors?
What are the three distinct dimensions of the legal environment?
What are the three distinct dimensions of the legal environment?
Which market is NOT considered a central institution of corporate governance?
Which market is NOT considered a central institution of corporate governance?
How does the political environment influence organizations?
How does the political environment influence organizations?
What is a characteristic of firms that rely heavily on technology?
What is a characteristic of firms that rely heavily on technology?
Which aspect of the external environment can create significant threats to organizations?
Which aspect of the external environment can create significant threats to organizations?
What is the primary responsibility of the audit committee?
What is the primary responsibility of the audit committee?
How does a company's ownership structure affect the board of directors?
How does a company's ownership structure affect the board of directors?
Which of the following is a typical responsibility of a CEO?
Which of the following is a typical responsibility of a CEO?
What role does the CEO play in managing financial risk?
What role does the CEO play in managing financial risk?
What is a key function of a Chief Financial Officer (CFO)?
What is a key function of a Chief Financial Officer (CFO)?
How does the CEO act as a liaison for the board?
How does the CEO act as a liaison for the board?
What area should the CFO focus on for effective management?
What area should the CFO focus on for effective management?
What is expected of the CEO regarding the company's programs, products, and services?
What is expected of the CEO regarding the company's programs, products, and services?
What is one of the primary responsibilities of a CFO regarding financing sources?
What is one of the primary responsibilities of a CFO regarding financing sources?
What role does a CFO play in managing risk within a company?
What role does a CFO play in managing risk within a company?
Which of the following is NOT a right of shareholders?
Which of the following is NOT a right of shareholders?
What is a key role of a CFO in major strategic issues?
What is a key role of a CFO in major strategic issues?
How can shareholders change the board of directors?
How can shareholders change the board of directors?
What is an important aspect of what CFOs must avoid while providing information to shareholders?
What is an important aspect of what CFOs must avoid while providing information to shareholders?
What function does the CFO serve in relation to other parties within an organization?
What function does the CFO serve in relation to other parties within an organization?
What distinguishes independent auditors in the context of corporate governance?
What distinguishes independent auditors in the context of corporate governance?
Study Notes
Corporate Governance in the Philippines
- The Audit Committee ensures a sound internal control system and board oversight.
- The Nomination Committee reviews and evaluates board member qualifications.
- The Compensation Committee establishes a transparent procedure for executive compensation.
Internal Foundation of Corporate Governance
- Board of Directors:
- Oversee the corporation's activities, management, and operations.
- Their authority and responsibilities are defined by shareholders and by-laws.
- Primary responsibility is protecting shareholder resources and ensuring a return on investment.
- Comprised of individual directors elected by shareholders.
- Includes audit and compensation committees.
- Audit Committee:
- Ensures financial statements and reports are accurate and comply with financial reporting standards.
- Ownership Structure:
- Significantly impacts the board's effectiveness in governance.
- Chief Executive Officer (CEO):
- Responsible for implementing the board's strategies and procedures.
- Acts as a bridge between the board and staff.
- Oversees program, product, and service delivery while maintaining quality.
- Manages financial risks, budgets, and organizational resources.
- Responsible for human capital management, following legal standards.
- Builds a positive image of the company to stakeholders.
- Chief Financial Officer (CFO):
- Implements internal financial controls.
- Analyzes capital investment requirements and secures financing.
- Develops relationships with financial institutions.
- Advises management.
- Participates in strategic decision-making.
- Manages company risk.
- Serves as a central point of connection within the organization.
- Maintains objectivity and financial transparency.
- Shareholders:
- Have the right to receive dividends and a share of company proceeds upon liquidation.
- Must balance their information rights with the company's competitive needs.
- Must ensure their influence does not hinder company operations.
- Can remove or refuse to re-elect directors if dissatisfied with their performance.
External Environment of Corporate Governance
- Auditors:
- Independent external institutions that ensure efficient company operations.
- Verify the accuracy of public records, adherence to reporting standards, and timely tax payments.
- Legal Environment:
- Composed of domestic laws of the home country, foreign markets, and international law.
- Markets:
- Crucial for corporate governance.
- Include product, capital, and managerial labor markets.
- Other External Factors:
- Political Environment:
- Influences company policies and benefits.
- Shapes internal and external organizational dynamics through human resource selection.
- Technological Environment:
- Impacts businesses relying heavily on technology.
- Social Environment:
- The ecosystem within which organizations operate.
- Political Environment:
Corporate Protection within Legal Boundaries
- Anti-Takeover Defenses:
- Used to prevent hostile takeovers.
- Can involve various tactics and strategies.
- Subject to legal regulations and review.
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Description
This quiz explores the essential components of corporate governance in the Philippines, including the roles of the Audit, Nomination, and Compensation Committees. It covers the responsibilities of the Board of Directors and the impact of ownership structure on governance effectiveness. Test your understanding of these critical concepts!
