Corporate Governance - sept 27

Corporate Governance - sept 27 - Officers-Senior employees...

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Corporate Governance Governance -themes: How to organize steers itself (values, rules, processes, impact, accountability/responsibility) - although this treatment of governance will be at the level of the corporation, it is important in all forms of institutions (businesses, government, civil society) -governing system Corporate governance -the processes, structures, and relationships through which the shareholders, as represented by a board of directors, oversee the activities of the business enterprise According to the OECD, governance -concerns the rights and responsibilities of a company’s management, its board, shareholders, and various stakeholders ***Three key players in corporate governance Shareholders - the owners of the corporation -interested in return on investment -usually responsible for electing board of directors Board of directors -responsible for governance -set long-term objectives -elected by shareholders to represent shareholder interests -fiduciary duty – look at Directors’ fiduciary duties
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Unformatted text preview: Officers-Senior employees that oversee daily operations-president-chief operating officer-members of the senior management team Directors’ fiduciary duties-To make decisions in the best interest of the company (which may not always be in the best interest of the shareholder)-consider other stakeholders-equal consideration to all shareholders-no personal profits at company expense-declare conflicts of interest Governance failures-Examples: Enron, WorldCom, Tyco-adversely affect many parties, both direct and indirect (shareholders, employees, suppliers, pension funds, communities, government, civil society) Principles of good governance (OECD)-ensure the basis for an effective corporate governance framework-understand the rights of shareholders and key ownership functions-provide equitable treatment of shareholders-appreciate role of stakeholders in corporate governance-ensure disclosure and transparency-outline clearly the responsibilities of the board...
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