The 9 Concepts of Corporate Governance

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The NINE CONCEPTS of CORPORATE GOVERNANCE www.accaforstudents.com/P1 More resources at: www.accaforstudents.com

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For ACCA students studying P1 Governance, Risk, and EthicsPowerpoint slide notes on the 9 concepts of corporate governance.Probity/honestyIntegrityFairnessResponsibilityIndependenceJudgmentTransparencyAccountabilityReputationMore resources at www.accaforstudents.com

Transcript of The 9 Concepts of Corporate Governance

Page 1: The 9 Concepts of Corporate Governance

The NINE CONCEPTS of CORPORATE

GOVERNANCEwww.accaforstudents.com/P1

More resources at:www.accaforstudents.com

Page 2: The 9 Concepts of Corporate Governance

What is “CONCEPT”?

Basic IDEA

Principles

THEMES

Generally accepted rule

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Mnemonic:

Penang Indian Food

Restaurant In Jalan Tunku

Abdul Rahman

Page 4: The 9 Concepts of Corporate Governance

The 9 Concepts

• Probity/honesty• Integrity• Fairness• Responsibility• Independence• Judgment• Transparency• Accountability• Reputation

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1. PROBITY

HONESTY & TRUTH

NOT MISLEADING

STRONG MORALITY“I cannot tell a

lie”-Abraham Lincoln

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2. INDEPENDENCE

Vested InterestInfluences

Connection/Relationship

IndependentFree from conflict

of interest

Decisions/actions

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3. FAIRNESS

EQUAL-HANDED

BALANCED

NO BIAS

RESPECT RIGHTS &

VIEWS

Stakeholders Stakeholders

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Clearly defined Roles &

Responsibilities

4. Responsibility

Track Credit & Blame

“It was not my responsibility”

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5. Integrity

High MORAL VALUESTRICT adherence to moral code

High PROFESSIONALISM

ACTIONS are honest, truthful,

fair, independent, etc without compromise

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6. Judgement

DECISIONS – for the good of the org

BALANCED EVALUATIONFACTORS

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7. Transparency

Open & clear DISCLOSURENot CONCEALING info

Transparency vs. Confidentiality?

Tajudin-Danaharta Case

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Tajudin-Danaharta Case

Tan Sri Tajudin Ramli

(former MAS CEO)

A government linked-company

(GLC)

Owes RM589m

Sue in court to recover the debt

February 2012 – out of court settlementBut the terms of the settlement remain

CONFIDENTIAL!There should be transparency for

the interest of the public (the principal)

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8. Accountability

ANSWERABLE for the actions/decisions

Can ask QUESTIONS

In all relationshipsCompanies to InvestorsProfessionals to their valuesBusiness to stakeholdersetc

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9. Reputation

“GOOD NAME” of the entity

Affects the business

Page 15: The 9 Concepts of Corporate Governance

More resources at:www.accaforstudents.com


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The 9 Concepts of Corporate Governance

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