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P1-01
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Define Corporate Governance
The system by which companies are directed and controlled in the interest of shareholders and stakeholders
What are the key concepts of CG? (9)
Fairness
Transparency
Independence
Probity
Responsibility
Accountability
Reputation
Judgment
Integrity
Explain this key concept of CG:
FAIRNESS
Equal treatment of all Stakeholders
Explain this key concept of CG:
TRANSPARENCY
Observe clarity (not ambiguous)
Do not withhold information
Provide relevant information
usually done through news release or annual report
Explain this key concept of CG:
INDEPENDENCE
No conflict of interest
Act to avoid being unduly influenced by vested interest
Explain this key concept of CG:
PROBITY
Do not mislead when providing information
Honesty
Explain this key concept of CG:
RESPONSIBILITY
Authority assumes responsibility:
- accepts liability and duty willingly
- bear the consequences of failure
Explain this key concept of CG:
ACCOUNTABILITY
Explain this key concept of CG:
REPUTATION
Responsibility of management to uphold good reputation
Develop and maintain personal reputation and moral stance of organization as well as accounting professionalism
Explain this key concept of CG:
JUDGEMENT
Directors decisions to achieve objectives
Directors must be able to communicate a meaningful conclusion based on their judgement/decisions
Ability to interpret codes as well as their compliance
Explain this key concept of CG:
INTEGRITY
Adhere to a strict moral and ethical standards
Do not compromise under any pressure
Highest moral standard
Author
levsha74
ID
198096
Card Set
P1-01
Description
Basic Principles of CG / Agency Theory
Updated
2013-02-05T15:33:05Z
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