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Questions and Answers
What is the main goal of the Code of Corporate Governance for publicly-listed companies approved by the SEC?
What is one of the key responsibilities of the Board in corporate governance?
What does the SEC require companies to establish and submit based on the Code of Corporate Governance?
In what manner should a competent board lead a company, according to the text?
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Which stakeholder's interests should the board consider, according to the principles of corporate governance?
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What is the purpose of the Code of Corporate Governance according to the SEC?
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What should the Board make known to all directors, stockholders, and stakeholders?
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Which of the following is NOT mentioned as a specific area where Board committees should be set up to support effective performance?
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What is one of the responsibilities that directors should fulfill to show full commitment to the company?
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Which of the following is NOT a key corporate governance concern mentioned in the text?
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What should the Board aim to exercise on all corporate affairs according to the text?
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Where should the composition, functions, and responsibilities of all committees established be outlined according to the text?
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What is the best measure of the Board's effectiveness according to the text?
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Which principle emphasizes the importance of applying high ethical standards?
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What do best practices relate to according to the text?
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What should a company ensure regarding non-financial and sustainability issues?
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How should the Board assess whether it possesses the right mix of backgrounds and competencies?
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What is one of the key responsibilities mentioned in Principle 10 regarding disclosures?
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What approach does the Code mentioned in the text adopt?
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What do the Recommendations in the Code represent?
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Which term is defined as 'the system of stewardship and control to guide organizations'?
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What is NOT considered in the application of the Code's provisions?
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'The Code of Corporate Governance for publicly listed companies' is the first of a series intended to cover what types of corporations?
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What is the goal of the Code in relation to Philippine corporations?
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What is the importance of having a strong internal control system and risk management framework?
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According to Principle 13, how should a company treat its shareholders?
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Why is it important for companies to respect stakeholders' rights?
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What is the purpose of developing a mechanism for employee participation according to Principle 15?
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What should a socially responsible company do according to Principle 16?
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How does having an effective internal control system benefit stakeholders?
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Study Notes
Code of Corporate Governance Overview
- Aims to enhance transparency, accountability, and ethical conduct among publicly-listed companies approved by the SEC.
- Establishes best practices to govern the actions and decisions of boards.
Board Responsibilities
- Fundamental duty includes leading the company effectively in alignment with stakeholder interests.
- Must ensure sound decision-making through informed perspectives and diverse competencies.
SEC Requirements
- Companies are required to establish a system to evaluate governance practices and submit governance reports per the Code.
Stakeholder Interests
- The board should consider the interests of all relevant stakeholders when making corporate decisions.
Purpose of the Code
- Designed to lead listed companies towards greater accountability and higher standards of corporate governance.
Reporting Obligations
- The Board must communicate clearly about their governance practices to all directors, stockholders, and stakeholders.
Board Committees
- Specific areas mentioned include audit, risk, and nomination; however, areas not mentioned as critical for committees include unrelated operational tasks.
Director Commitment
- Directors should demonstrate full commitment by actively participating in company meetings and decision-making processes.
Governance Concerns
- Concerns such as compliance, risk management, and ethical behavior are emphasized; areas such as speculative investments may not be included.
Oversight in Corporate Affairs
- The Board should exercise diligent oversight to ensure responsible management of corporate affairs.
Committee Structure
- Composition, functions, and responsibilities must be explicitly outlined in corporate governance manuals or policies.
Board Effectiveness
- Best measured through the achievement of strategic goals and effectiveness in governance practices.
Ethical Standards
- High ethical standards are underscored to foster trust and integrity in corporate relationships.
Best Practices Context
- Relate to a set of guidelines informed by ethical behavior, stakeholder engagement, and effective governance.
Non-Financial Issues
- Companies should ensure transparency and responsibility regarding non-financial and sustainability issues.
Board Assessment
- Regular evaluations of the board’s skills and competencies to ensure a diverse mix of backgrounds is crucial.
Disclosure Commitments
- Principle 10 emphasizes the importance of transparent disclosures about governance practices and financial performance.
Code Approach
- Adopts a principles-based approach to governance, offering flexibility while promoting accountability.
Recommendations Significance
- Serve as guidance for implementing best practices and enhancing corporate governance structures.
Governance Definition
- Defined as 'the system of stewardship and control to guide organizations' toward performance goals.
Code Application Limitations
- Applicability of certain provisions might vary based on company size, type, or industry complexities.
Future Governance Series
- The Code sets the foundation for a series intended to address governance for various types of corporations.
Goal for Philippine Corporations
- Aims to elevate the standard of corporate governance across the Philippine corporate landscape.
Internal Control Importance
- Strong internal controls and risk management frameworks protect assets, ensure compliance, and enhance operational efficiency.
Shareholder Treatment
- Companies should allow shareholders fair treatment, especially regarding their voting rights and access to information.
Stakeholder Rights Respect
- Respecting stakeholders' rights is pivotal for long-term sustainability and maintaining trust.
Employee Participation Mechanism
- Developed to engage employees in decision-making and promote a culture of inclusion and accountability.
Social Responsibility Focus
- Encourages companies to actively contribute to societal well-being and sustainable practices.
Stakeholder Benefit from Control Systems
- An effective internal control system safeguards stakeholder interests by mitigating risks and enhancing financial accuracy.
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Description
Test your knowledge on the Securities and Exchange Commission's Code of Corporate Governance for publicly-listed companies. Learn about the regulations and standards aimed at fostering an ethical corporate culture and ensuring compliance with corporate governance best practices.