12 Questions
What does governance refer to?
The exercise of power and decision-making in society
Which characteristic of good governance emphasizes fairness in decision-making?
Equity and Inclusiveness
What is a key requirement for enforcing accountability in governance?
Rule of Law
What does 'participation' entail in the context of good governance?
Freedom of association and expression
Which aspect of good governance emphasizes reaching a broad consensus on societal interests?
Census Orientation
How is corporate governance defined?
A system by which businesses are directed and controlled
What is the fundamental aim of corporate governance?
Ensure fair and equitable treatment of shareholders
Which of the following is not an objective of Corporate Governance as mentioned in the text?
Reduce Corporate Taxes
What does the Corporate Governance Structure specify?
Distribution of rights and responsibilities among different participants in corporations
Who provides effective oversight through the election of board members?
Shareholders
Which of the following is a basic principle of effective Corporate Governance as mentioned in the text?
Transparency and Full Disclosure
What role do Board of Directors play in Corporate Governance?
Approve major initiatives such as buying or selling stocks
Study Notes
Governance
- Refers to the process of wielding power, authority, and influence to make decisions and implement policies for public life and social upliftment
- Involves decision-making and implementation through the exercise of power or authority by leaders
Characteristics of Good Governance
- Participation: freedom of association and expression, and an organized civil society
- Rule of Law: fair legal frameworks enforced impartially
- Transparency: decisions and enforcement follow rules and regulations
- Responsiveness: institutions and processes serve the needs of all stakeholders in a reasonable time frame
- Consensus-Oriented: mediation of different interests to reach a broad consensus on the best interest of the whole community
- Equity and Inclusiveness: all members feel they have a stake in society and are not excluded
- Effectiveness and Efficiency: processes and institutions produce results that meet societal needs while making the best use of resources
- Accountability: key requirement for good governance, cannot be enforced without transparency and the rule of law
Corporate Governance
- Defined as a system of rules, practices, and processes that direct and control businesses
- Purpose: to facilitate effective, entrepreneurial, and prudent management for long-term success
- Fundamental aim: to enhance shareholders' value and protect the interest of other stakeholders
Objectives of Corporate Governance
- Fair and equitable treatment of shareholders
- Self-assessment
- Increase shareholders' wealth
- Transparency and full disclosure
Basic Principles of Effective Corporate Governance
- Transparency and full disclosure
- Accountability
- Corporate control
Parties Involved in Corporate Governance
- Shareholders: provide effective oversight through election of board members and approval of major initiatives
- Board of Directors: responsibilities include strategic and risk management
Test your knowledge on governance and the characteristics of good governance, including participation and rule of law. Explore how decisions are implemented through the exercise of power or authority by leaders.
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