Introduction to Governance and Ethics

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According to Robert Ian Tricker, what are the main issues addressed by corporate governance in relation to the Board of Directors?

The interaction with top management and relationships with the owners and others interested in the affairs of the company.

How does Milton Friedman define corporate governance?

The conduct of business in accordance with shareholders' desires, which generally is to make as much money as possible, while conforming to the basic rules of the society embodied in law and local customs.

What is the primary objective of 'good' corporate governance according to the global consensus?

Maximizing long-term shareholder value.

In which key areas does corporate governance play a crucial role in organizational contexts?

Strategic direction, accountability, transparency, and stakeholder management. Signup and view all the answers

What is the primary objective of good governance in managing public affairs?

To promote the welfare of society Signup and view all the answers

What is the main purpose of corporate governance in creating a corporate culture?

To create a culture of transparency, accountability, and disclosure. Signup and view all the answers

Why is corporate governance necessary in an organization?

To create a corporate culture of transparency, accountability, and disclosure. Signup and view all the answers

What is the core concept of transparency in good governance?

Openness, clarity, and accessibility of government decision-making processes, operations, and information Signup and view all the answers

What is the key responsibility of government officials and institutions in good governance?

To be answerable for their actions, decisions, and performance to the public and other stakeholders Signup and view all the answers

What is the primary focus of governance in an organization?

The processes, systems, and structures that guide decision-making and management Signup and view all the answers

What is the common goal of the principles of good governance, including transparency, accountability, and participation?

To promote the welfare of society and ensure responsiveness to the needs of citizens Signup and view all the answers

What is the ultimate goal of good governance in the management of public affairs?

To promote the welfare of society and ensure the effective and efficient use of power Signup and view all the answers

What is the main idea of the Stewardship Theory in the context of corporate management?

The managers should manage the corporation as if it is their own, motivated by the principal's objective, and behave in a collective, pro-organizational, and trustworthy manner. Signup and view all the answers

According to the Stewardship Theory, what is the first step in achieving excellence in corporate management?

Identifying and formulating values as standards. Signup and view all the answers

What is the purpose of the Board of Directors in a corporation, according to the strategies for corporate social responsibility?

To meet regularly, retain full and effective control over the company, and monitor the executive management. Signup and view all the answers

Why is it essential to have a lead independent director on the Board of Directors when the chairman is also the chief executive?

To ensure a balance of power and authority, and prevent any one individual from having unfettered powers of decision. Signup and view all the answers

What is the primary responsibility of the company secretary in relation to the Board of Directors?

Ensuring that board procedures are followed and that applicable rules and regulations are complied with. Signup and view all the answers

What is the requirement for listed companies in terms of reporting their compliance with the Code?

They should make a statement about their compliance in their report and accounts, and give reasons for any areas of noncompliance. Signup and view all the answers

What is the role of moral support in the Stewardship Theory?

To fill any gaps in values and promote a collective, pro-organizational, and trustworthy behavior pattern among managers. Signup and view all the answers

What is the primary role of non-executive directors in relation to the company's strategy and performance?

To bring an independent judgment to bear on issues of strategy, performance, resources, and standards of conduct. Signup and view all the answers

What is the requirement for the majority of non-executive directors in terms of their relationship with management?

They should be independent of management and free from any business or other relationship that could interfere with their independent judgment. Signup and view all the answers

What information should be disclosed in the company's annual report regarding directors' emoluments?

Full and clear disclosure of directors' total emoluments, including pension contributions and stock options, with separate figures for salary and performance-related pay. Signup and view all the answers

What is the duty of the board in relation to financial reporting?

To present a balanced and understandable assessment of the company's position, providing a true and fair picture of financial reporting. Signup and view all the answers

What is the requirement for the directors' reporting on the company's going concern status?

The directors should report that the business is a going concern, with supporting assumptions or qualifications as necessary. Signup and view all the answers

What is the primary role of auditors in relation to a company's financial statements?

To provide a reasonable assurance that the financial statements are free of material misstatements. Signup and view all the answers

What is the position of directors in relation to a company?

As agents and trustees of the company. Signup and view all the answers

What is the significance of maintaining a professional and objective relationship between the board of directors and auditors?

To provide a true and fair view of the company's financial statements. Signup and view all the answers

What was the outcome of the COSO report in 1992?

The issuance of Internal Control. Signup and view all the answers

What was the significance of the Sarbanes-Oxley Act in 2002?

It was a major development in corporate governance in the USA. Signup and view all the answers

What was the focus of the Foreign Corrupt Practices Act in 1977?

The prevention of corrupt practices by companies. Signup and view all the answers