DefinitionGovernanceCorporate BodyCompaniesPublic SectorSocial Sector

Important IssuesAccountabilityStakeholdersTransparencyGovernance/ Board StructuresMonitoring Performance

CG in Public SectorSeven Principles of Public LifeSelflessnessIntegrityObjectivityAccountabilityOpennessHonestyLeadership

Dominant Personality AspectPrincipal cause of CG issuesCharacteristics of a dominant leaderCharismaticPowerfulIntolerantOften seemingly sincereDoes not nurture subordinates

StakeholdersBoard of Directors elected by shareholders Controlling (Majority / Minority)Non-controlling (individual / institutional)Lenders (individual / institutional)Management / EmployeesClients / SuppliersSociety (includes government)

Key PersonsMr ShareholderIndividual / Institutional InvestorChairmanBoard MembersExecutive / Non-executiveIndependent / NomineesCEOOther Managers / Employees

Agency ProblemMinority ControllerMajority ControllerCost of agency monitoring

Key Issues of CGFinancial Reporting and AuditingDirectors RemunerationRisk TakingEffective Communication between:Board and shareholdersCompany and stakeholdersCorporate Social Responsibility

Financial ReportingForce of LawInfluence of professional bodiesAudit Report how valid is it?Does it work?Role of Institutional InvestorProfessional analystsWhat is the real solution?

Directors RemunerationBig issue in West, not hereWho sets it?Why do shareholders complain after approving?Disunity in shareholders?

Company-Stakeholders RelationsStructure of the BoardIs it representative?Does it have sufficient Independents?Articles of Association Contents?Allocation of power to stakeholdersActual use of powers

Risk ManagementWHO CARES:To take risk or not to take risk?How much risk to take?How to minimize / manage risks?NATURE OF RISKSOperationalTakeovers

CommunicationWhat needs to be communicated?FrequencySet pattern, or need basisWhy communicate?

Legislation for CGCompany LawRegulations for listed companiesSpecific CG related laws?Social pressure can often have the same force as law.

Questions asked when companies failWas it management incompetence?Why was it not noticed before disaster?DishonestyDid the dishonest person get away with it?How?Why?

Eventually, this boils down to poor governance.

Approaches to CGShareholder Value approachEnlightened Shareholder ApproachPluralist ApproachEthical conduct and Code of ethics in CGAssignment of this week

Shareholders ApproachBoard cares for only shareholdersShareholder means:All shareholders, orMajority shareholders only, orVocal shareholders only?Balanced treatmentBetween shareholders and others

Enlightened ShareholdersApproachBalance between the interest of all stakeholders, but basic attention to shareholders.Issues:Which shareholdersPeople who wear two or more caps

Integrated/Pluralist ApproachAccountabilityTo shareholders, but also to othersResponsibilityTo all stakeholders.Means of enforcement

The Corporate SinsSloth (unwillingness to take risk/initiative)GreedFear

What is the Best Approach?WhichWhyWhere

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