PLDW-Corporate-Compliance - Corporate Compliance and Ethics Programs Beware and Be Smart 1 What is Corporate Governance Corporate governance refers to

PLDW-Corporate-Compliance - Corporate Compliance and Ethics...

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______________________________________________________________________________________________________________ Corporate Compliance and Ethics Programs Beware and Be Smart 1. What is Corporate Governance? Corporate governancerefers to the manner in which a corporation is directed, and laws and customs affecting that direction. It includes the laws governing the formation of firms, the bylaws established by the firm itself, and the structure of the firm. A company's corporate governance refers to the relations, distribution of rights and responsibilities by and among primarily four groups of participants; i.e., the board of directors, managers, employees and shareholders. The governance of a corporation includes the rules and procedures for making decisions and provides the structure through which the company objectives are established, the means by which stated goals are achieved, and the monitoring of the performance of those objectives. In short, the corporate governance system of an organization is the structure by which a company's directors and managers act in the interests of the firm and its shareholders and employees and how the company aspires to holding the board, managers and employees accountable to capital providers and third parties relying upon the value of its assets. Issues of fiduciary duty and accountability are often discussed within the framework of corporate governance. 2. Corporate governance standards have changed The public scandals of Enron, Tyco and WorldCom have resulted in a regulatory and investigative response unlike any other in history. The passage of Sarbanes-Oxley Act of 2002 (SOX) is more sweeping than any other legislation since the New Deal. Board rooms and corporate offices now have handbooks addressing governance and compliance; however, without an
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