corporate governance
TRANSCRIPT
CLASS PRESENTATION Nov 14, 2012
Saad Khan Faisal Tahir Faizan Ali Khan
“ A couple of hours in the laboratory can save a couple of months in the library “
Today’s Topic
Importance of Corporate Governance
in Organizations
Corporate Governance – The Hue & Cry!
What is CG??
A system by which a corporation is directed and controlled ~ Cadbury Committee 1992
The framework of rules, relationships, systems and processes within and by which authority is exercised and controlled in corporations ~ CG Principles & Recommendations, Australia
Expanding the CORPORATE GOVERNANCE
Governance Roles
Board Structure Role of the board Role of individual directors Role of the Chairman Role of the CEO
Key - Board Functions
Strategy CEO Evaluation Monitoring Risk Management Compliance Policy Framework Networking Stakeholder Communication Decision Making
Board Procedures
Board meetings Board meeting agenda Board papers Board minutes The board calendar Committees
Effective Governance
Director protection Board evaluation Director remuneration Director development Director selection & induction
Why is it important??
It takes 20 years to build a reputation, and five minutes to ruin it ~ Warren Buffet
Boards generally met the characteristics of good governance but failed to perform effectively ~ Walker Review, U.K. 2010
Benefits of Sound Corporate Governance
Access to capital / reduce cost of capital Improved reputation Ensuring business sustainability Positive impact on organizational efficiency Ethical behavior Better operating results
Corporate Governance as Risk Mitigation
Paramount importance to a company as important as its primary business plan prevent corporate scandals, fraud and the civil and criminal
liability of the company enhances a company’s image in the public eye as a self-policing
company dictates the shared philosophy, practices and culture of an
organization and its employees.
Conclusion
Corporation without a system of corporate governance is often regarded as a body without a soul or conscience
Corporate governance keeps a company honest and out of trouble
If this shared philosophy breaks down, then corners will be cut, products will be defective and management will grow complacent and corrupt.
The end result is a fall that will occur when gravity – in the form of audited financial reports, criminal investigations and federal probes – finally catches up, bankrupting the company overnight.
Dishonest and unethical dealings can cause shareholders to flee out of fear, distrust and disgust.
