Download - Corporate Governance of Listed Companies
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Corporate Governance of Listed Companies
Aysel Muradlı, Business Administration
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Company whose shares are traded on an official stock exchange.
What is a listed company?
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The principal difference between listed and privately held companies is that listed companies have shares that are publicly traded on a stock market.
Listed companies have to make transparent and timely disclosure of information to shareholders.
Listed vs Private Company
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Both are incorporated under Companies Act.
Not all public companies are listed on a stock exchange, but all listed companies must be public companies.
Listed vs Public Company
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Many shareholders (minimum limit)
Stock markets and their listing requirements are important to the corporate governance of listed companies.
Prospectus- a legal document that reviews the company, its history, business, and financial situation
Features of Listed Companies
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Mission◦To provide an organized, fair and efficient market
for trading securities
Requirements◦Listing Agreement Compliances◦Stock Exchange Internal Norms◦Compliance of Securities Laws◦Compliance of Companies Act
Stock Exchange’s Role
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The most important regulatory body in the US
The SEC oversee the proper functioning of primary and secondary financial markets.
◦ the protection of security holder rights◦ the prevention of corporate fraud
Securities and Exchange Commission (SEC)
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Corporate governance standards of listed companies according to the NYSE.
◦The listed company’s board is required to have a majority of INED.
◦Nonexecutive directors must meet independently from executive directors on a scheduled basis.
◦The compensation committee of the board must consist entirely of INED.
New York Stock Exchange(NYSE)
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Corporate governance standards of listed companies according to the NYSE.
◦The audit committee must have a minimum of 3 members, all of whom are “financially literate” and at least 1 of them is a “financial expert”.
◦The company must have an internal audit function.
◦CEO must certify annually that the company is in compliance with NYSE requirements.
New York Stock Exchange(NYSE)
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Important provisions of the SOX:
◦The requirement that the CEO and CFO certify financial results
◦An attestation by executives and auditors to the sufficiency of internal controls
◦ Independence of the audit committee of the board of directors
◦A limitation of the types of non-audit work an auditor can perform for a company
◦A ban on most personal loans to executives or directors
Sarbanes–Oxley Act of 2002
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Thanks for your attention!