ACC 511 Corpporate Governance & Accountability
Table of content
1. Question 1
1. Introduce to Corporate Governance
2. Governance makes a Difference
3. Failures of Corporate Governance
4. Failures in Major companies
5. Reform of Corporate Governance
2. Question 2
1. Introduce to Cadbury Report
Based on the above it has been stated that “the problem is not a failure to comply with rules but a failure in governance practice”. Do you agree and why? (10 Marks)
Introduce to Corporate Governance
Corporate governance looks at issues pertaining to transparency, integrity, effectiveness and accountability in the management of the affairs, and all other activities of an organization. Management is concerned with the company’s operations, functions and financial performance; hence, corporate governance aims to involve the quality assurance of the operation of the board itself. The concern is for the welfare, good performance, corporate ethics and morality, as well as social and public responsibility for the good corporate citizenship. Corporate governance also involves in system to ensure that the organization’s obligations to its major stakeholders.
The relationship among the many stakeholders and the way of corporation is directed and governed is therefore created. Stakeholders might include customers, employees, creditors, suppliers and distributors, the community and the owners at large. The principle stakeholders are the board of directors, managements and shareholders. The first model of corporate governance implementation is often involves three groups: – executive board, supervisory board, and advisory board whose are appointed by shareholders to run the company except last group are bought in as independent experts to assist the company. Hence, what are good practices of corporate governance? How to ensure the directors act in the interests of the shareholders?
As a result, the reform of corporate governance has developed debating the directors should act in the interests of all those to whom they owe duties, or the stakeholders. A more complex regulation of company law has developed to prevent recurring scandals. In modern days, corporate governance has been defined as the way in which companies are directed and controlled by Sir Adrian Cadbury. Sir Adrian Cadbury also proposed a voluntary code of
governance based on best practice principles after failures at Barings Bank and Polley Peck in 1992. The code of best practice is underlying the idea of disclosure.
Governance Makes a Difference
A good system and governance makes sure that the organizations delivered good result to the boards and generate business profits. The relative effectiveness of corporate governance has become a role on how well the organizations perform. Similar, with organizations that have performed poorly; it is commonly the problems found in poor governances and poor of board structures. That is, an effective board of directors and structures carry out its’ integrity and competence. When individuals serve as board members: – directors, officers, auditors and employees, they undertake a serious fiduciary responsibility. They represent themselves integrity and make sound decisions. Corporate governance influences employee’s work attitudes, behaviors and perceptions. Corporate governance represents a system of shared values and beliefs that interact with organizational structure, and board of members.
Originally posted 2017-11-21 20:50:10.