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Corporate Governance (Approaches (Choice of government regime (Dominant…

- - - - Enron Scandal
    - - SOX
    - - Clarity of what the entity must do
      - Standardisation for all companies
      - Binding requirements
  - - - Avoids people looking for loopholes
      - underlying belief - want to play by principles
      - Flexibility
      - Avoids checkbox exercises
  - - - Bank, family or multiple shareholders
- - - - recent and relevant financial experience
- - - - Headed by an effective board with collective responsibility
      - Clear division of responsibilities between the Chairman and the Chief Executive
      - No one individual should have unfettered powers of decisions
      - Non-executive directors should constructively challenge and help develop proposals for strategy
    - - Appropriate balance of skills, experience, independence and knowledge
      - Formal, rigorous and transparent procedure for the appointment of new directors
      - All directors should receive induction and should regularly update and refresh skills and knowledge
      - Be provided with quality and timely information to discharge duties
      - Formal and rigorous annual evaluation of performance
      - Directors should be submitted for re-election at regular intervals
    - - A fair, balanced and understandable assessment of the entity's position and prospects
      - Responsible for determining the nature and extent of the significant risks it is willing to take to achieve strategic aims
      - Maintain sound risk management and internal control systems
      - Establish formal and transparent arrangements for corporate reporting and risk management and internal control principles and for maintaining an appropriate relationship with the entity's auditor
    - - Sufficient to attract, retain and motivate directors of the quality required to run the entity successfully, should not be excessive
      - Structured to link a significant proportion of the rewards to corporate and individual performance
      - Formal and transparent procedure for developing policy on executive remuneration
      - Directors shouldn't be involved in deciding their own remunerisation
    - - Dialogue with shareholders based on a mutual understanding of objectives
        
        Board as a whole has responsibility for this
      - Use AGM to communicate with investors and to encourage participation