Board level information Desired CG was not in place and there was no clear information pathway. Role of internal audit committee is arguable. Risks that should be considered — Financial risk. Voluntary Purely legal approach Cg code Code — a set of practices, guidelines which are expected to be followed by the companies 2 approaches for cg code 1 Principle based — lay down broad principles; comply or explain principles link it with listing.
There should be some independent directors with ability to question the acts and deeds and the following structures are recommended. The control system was not in place.
In cases like Enron and worldcom it has been seen that the external auditors are able to flee away leaving the company in distress.
Communication skills, good listener, motivator etc. Agents and Stewards Agency theory Principal shareholders contract with agents seek self interest It says that it is not possible that agents take care of other money with as much vigilance of vow.
The boards of directors are responsible for the governance of their companies. He was forceful and rigid and thus not a true leader.
Also introduce PCAOBA Public company accounting oversight board of America Was criticized for high cost of compliance CG is a process by which companies are directed and controlled Many attempts have been made to define CG and this one by Cadbury is one of the most comprehensive.
Manipulation Most of the cases of accounting frauds, falsifying records, deceiving shareholders and bankruptcy rest upon the manipulation of the balance sheet and the tactics used to fudge the data.
How board thinks directors should spend their time How directors actually do spend their time Relation between functions Strategy formulation Policy making supervision and monitoring Accountability Roles: The company should have gone to auditors like Delloitte who are reliable and tested.
Role of independent directors The question Are independent directors really independent has been topic of debate for ages. Under-reserving Like we say in the HLL case under-reserving is a tactic used by firms but in the long run it cant stop companies from collapsing. European Two Tier model Shareholders Supervisory board Executive board Management Employees and staff The supervisory board overlooks functions of executive board and can question and alter the function This model is preferred over unitary board.
Here also majority of BOD were near and dear ones of Bright so everybody chose to stay quiet about what is going on. Its composition and leadership needs attention. Functions of the board Majorly there are four functions of the board depending upon the conformity to past or existing and the performance expected for future.
Enron failure — faulty accounting policies; creation of special purpose entities to conceal losses; excessive executive compensation Worldcom — The BOD did not oppose the ambitious investment of Worldcom in fiber optic cables and infrastructure to become a market leader a short term goal. Make the companies which are not adopting explain why they are not adopting 2 Rule based approach — comply or get prosecuted; in extreme cases companies are delisted.
They seek personal interest and detrimental effect on shareholders Stewardship theory Owners chose and elect stewards directors who play the role of stewards Contrary to agency theory it says owners vest their trust in directors who act as stewards of shareholders money.
Better managed companies are valued more. Control systems The case clearly shows violation of many acts and laws. Usually there are tie ups between management and auditors, some internal settlement that leads to uch actions.
The directors get huge money for just attending 4 meetings, so they agree with whatever the companies say to earn easy money or else they would be removed from the board.
BJP chief Nitin Gadkari driver was shown as a director in a company. For a company to enter in stockmarket it has to that it follows Cadbury suggestions Corporate governance is directly related to market valuation of a company.THREE ESSAYS IN CORPORATE GOVERNANCE by Vishaal Rabindranauth Anand Baulkaran BBA, University of New Brunswick, MBA, University of New Brunswick, Investors’ Reaction to the Implementation of Corporate Governance Mechanisms mechanism impacts insignificantly on investor reaction.
This paper is organized in a way that the first section investigated the price reaction to corporate governance. Essays - largest database of quality sample essays and research papers on Reflection Papers On Good Governance.
StudyMode - Premium and Free Essays, Term Papers & Book Notes Corporate Governance refers to the way a corporation is governed.
It is the technique by which companies are directed and managed. working papers, please join our Discussion Paper No.January Corporate Power is Corporate Purpose II: An Encouragement for Future Consideration from Professors Johnson and Millon Subsequently published in Convergence and Persistence in Corporate Governance (Jeff Gordon & Mark Roe, eds., Cambridge University Press: ).
- Corporate Governance Corporate Governance is the relationship between the shareholders, directors, and management of a company, as defined by the corporate. A Reaction Paper on Corporate Governance Lim, Christine Diane De La Salle University The Need for Corporate Governance Corporate Governance has been vital in the success of both private investments and public corporations.
It is a system by which .Download