Presentation Chapter 15

Presentation Chapter 15 - Emerging Issues in Corporate...

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Unformatted text preview: Emerging Issues in Corporate Governance Chapter XV Chapter Objectives: Understand emerging issues and the challenges, opportunities, and improvement they present to corporate governance. Realize the importance of maintaining investor confidence worldwide. Understand the initiatives being taken toward convergence in corporate governance. Recognize the importance of SEE performance. Understand the emerging shareholder issues pertaining to the nomination process, voting system, proxy statements, and regulations, and possible improvements to these processes. Illustrate the challenges to director independence, nomination, compensation, composition, and evaluation, and how those challenges can be met. Show the challenges that arise from unresolved financial reporting issues, including financial restatements, enhanced business reporting, forward-looking financial reports, and stock option accounting, and how they can be addressed. Understand antifraud programs and controls designed to strengthen the reliability of financial reports. Define the emerging audit issues in the post-SOX era and solutions to these issues. Key Terms Basel Committee for Banking Supervision Corporate social responsibility (CSR) Corporate sustainability reporting Enhanced business reporting (EBR) Global Reporting Initiative (GRI) Governance Metrics International (GMI) International Corporate Governance Network (ICGN) International Financial Reporting Standards (IFRS) International Monetary Fund Key performance indicators (KPIs) Investor Confidence and Global Financial Markets Investor confidence in the global financial markets is the key driver of economic growth, global competition, and financial stability. Generally speaking, investors are considered to be confident when stock prices are on an upward trend and the news about future stock performance is optimistic. The main task is to restore investors confidence. Many of these recommendations, such as convergence to IFRS and corporate codes of ethics, have already been implemented or are in the process of being implemented. Global Financial Markets The speed with which financial transactions can be conducted and money can be moved around the world encourages regulators to establish a global financial infrastructure. Different types of corporate governance structure are exposed to different financial misconduct and scandals. For example, the dispersed ownership system of governance in the United States is prone to earnings management schemes (e.g., Enron, WorldCom), whereas concentrated ownership systems are more vulnerable to the appropriation of private benefits of control (e.g., Parmalat)....
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Presentation Chapter 15 - Emerging Issues in Corporate...

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