02-06-2012, 03:46 PM
Corporate Governance
Corporate governance.ppt (Size: 988 KB / Downloads: 45)
What is corporate governance?
Corporate governance is the set of processes, customs, policies, laws, and institutions affecting the way a corporation (or company) is directed, administered or controlled. Corporate governance also includes the relationships among the many stake holders involved and the goals for which the corporation is governed.
Stakeholders
The principal stakeholders are the shareholders/members, management, and the board of directors. Other stakeholders include labor (employees), customers, creditors (e.g., banks, bond holders), suppliers, regulators, and the community at large. For Not-Profit-For Corporations or other membership Organizations the “shareholders” means “members”.
Corporate governance focuses on
Structures and mechanisms that ensure internal structure and rules of the board of directors
Disclosure strictures in regard to information for shareholders and creditors
Transparency of operations and an impeccable process of decision-making
Control of management
A simple model for corporate governance
Shareholders elect directors as their representatives
Directors vote on key issues and adopt majority decision
Directors make transparent decisions for which shareholders and others can make them accountable
Companies adopt accounting standards that generate information required by directors, investors, other stakeholders for decision-making
Companies adopt policies and practices compatible with relevant national, state, and local laws