BPE chap5 - Ethical Governance Accountability Management Part 3 Corporate Ethical Governance Accountability Chapter 5 Intro directors executives and

BPE chap5 - Ethical Governance Accountability Management...

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Ethical Governance, Accountability & Management Part 3
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Corporate Ethical Governance & Accountability Chapter 5
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I ntro directors, executives, and professional accountants all have essential roles to play for ethical governance and accountability. This chapter deals with both common and distinct aspects related to each other. Modern governance & accountability framework Threats to good governance & accountability Key elements of corporate governance & accountability Director & office liability Public accountability benchmarks
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Modern governance & accountability framework to shareholders & other stakeholders New expectations ---- New framework to restore credibility SOX reformed the gov&acct framework for corporations Accountability to shareholders or stakeholders? growing capacity of nonshareholders to influence the achievement Fiduciary Obligation of boards of directors 3 types of FO: the duties of obedience; loyalty; due care directors should examine the trade-offs between shareholders and stakeholders and choose on or the other, or a blended solution Governance for board stakeholder accountability governance process based on stakeholder interests Identify org values Guidance mechanisms ---- ethical culture & code of conduct
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Modern governance & accountability framework to shareholders & other stakeholders Governance for board stakeholder accountability governance process based on stakeholder interests Stakeholder impact analysis, as tools to exam, rank, and assess stakeholder interest Stakeholder-accountability oriented governance process, SAOG. F-5.2 Identify org values, the foundation of behavior Figure 5.3, process is represented as a diagram Figure 5.4, linkage between motivation and actions Table 5.1, multicultural diversity of value problems, and a set of universal value Guidance mechanisms ---- ethical culture & code of conduct code of conduct states the values selected, principle flowing from the values, and rules followed to ensure the values are respected a note in an improvement of effectiveness to be effective, a code must be reinforced by a comprehensive ethical culture
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FIGURE 5.1 MAP OF CORPORATE STAKEHOLDER ACCOUNTABILITY Shareholders Activists Governments Creditors Lenders Suppliers Customers Employees Corporation Others, including the Media, who can be affected by or who can affect the achievement of the corporation s objectives
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PUBLIC INTEREST SHAREHOLDERS + OTHER STAKEHOLDERS CORPORATE CULTURE Created by Management Leads to Corporate Actions Feedback Guidance All Interests Accountability = Financial & Strategic including Ethical & Legal Sets Vision, Mission, Strategy, Policies, Codes, Compliance, Feedback, Compensation Appoints CEO, CFO BOARD OF DIRECTORS External Auditors Lawyers Financial Reports Ethics Officer Whistle- Blowers Professional Accountants Including Internal Auditors FIGURE 5.2 STAKEHOLDER ACCOUNTABILITY ORIENTED GOVERNANCE PROCESS
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PUBLIC INTEREST SHAREHOLDERS + OTHER STAKEHOLDERS
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