Podcast
Questions and Answers
What is the primary goal of corporate governance?
What is the primary goal of corporate governance?
- To ensure the company's financial performance
- To oversee the company's day-to-day operations
- To maximize shareholders' wealth
- To balance the interests of stakeholders (correct)
Which of the following is a key principle of corporate governance?
Which of the following is a key principle of corporate governance?
- Confidentiality
- Fairness (correct)
- Efficiency
- Profitability
Who is responsible for setting the company's strategy?
Who is responsible for setting the company's strategy?
- Shareholders
- CEO/Managing Director
- Board of Directors (correct)
- Audit Committee
What is the primary role of the Audit Committee?
What is the primary role of the Audit Committee?
What is the purpose of Shareholders' Meetings?
What is the purpose of Shareholders' Meetings?
Who is accountable to shareholders and stakeholders?
Who is accountable to shareholders and stakeholders?
What type of budget outlines projected cash inflows and outflows over a specific period of time?
What type of budget outlines projected cash inflows and outflows over a specific period of time?
Which type of audit examines an organization's operational efficiency and effectiveness?
Which type of audit examines an organization's operational efficiency and effectiveness?
What is the first step in the audit process?
What is the first step in the audit process?
What is the purpose of financial analysis in financial management?
What is the purpose of financial analysis in financial management?
What financial management tool calculates the present value of future cash flows?
What financial management tool calculates the present value of future cash flows?
What type of budgeting technique starts from a 'zero balance' and justifies every expense?
What type of budgeting technique starts from a 'zero balance' and justifies every expense?
What is the primary purpose of a balance sheet?
What is the primary purpose of a balance sheet?
What type of cost is directly related to the production of a product or service?
What type of cost is directly related to the production of a product or service?
What is the primary goal of budgeting?
What is the primary goal of budgeting?
Which cost accounting technique assigns costs to specific activities or departments?
Which cost accounting technique assigns costs to specific activities or departments?
What financial statement reports revenues and expenses over a specific period of time?
What financial statement reports revenues and expenses over a specific period of time?
What is the primary focus of cost accounting?
What is the primary focus of cost accounting?
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Study Notes
Corporate Governance
Definition
- Corporate governance refers to the system of rules, practices, and processes by which a company is directed and controlled.
- It involves balancing the interests of stakeholders, including shareholders, employees, customers, and the wider community.
Key Principles
- Accountability: Directors are accountable to shareholders and stakeholders.
- Transparency: Information should be disclosed in a timely and accurate manner.
- Fairness: Equality of opportunity and equal treatment for all stakeholders.
- Responsibility: Directors are responsible for the company's performance and its impact on the environment and society.
Roles and Responsibilities
- Board of Directors:
- Responsible for setting the company's strategy and overseeing its implementation.
- Ensures the company's financial performance and internal controls.
- CEO/Managing Director:
- Responsible for the day-to-day management of the company.
- Implements the company's strategy and oversees its operations.
- Audit Committee:
- Responsible for ensuring the accuracy and reliability of the company's financial statements.
- Oversees the internal audit function and the company's risk management processes.
Corporate Governance Mechanisms
- Shareholders' Meetings: A platform for shareholders to participate in corporate governance.
- Board Committees: Committees established by the board to oversee specific areas, such as audit, remuneration, and nomination.
- Independent Directors: Directors who are independent of management and have no conflicting interests.
- Stakeholder Engagement: Engagement with stakeholders, including shareholders, employees, customers, and the wider community.
Importance of Corporate Governance
- Enhances Accountability: Promotes transparency and accountability among directors and management.
- Protects Stakeholders' Interests: Ensures that the interests of stakeholders are protected and respected.
- Improves Performance: Good corporate governance can improve a company's financial performance and reputation.
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