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Corporate Governance, Board of Directors, Management, Internal audit's…
Corporate Governance
Corp Gov problems
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Illegal insider
trading
buy/ sell a security
while in possession of mtl,
nonpublic info abt when necessary
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IIA principles
- independent and obj board
- operational structure - well known by senior mgt and board
- org strategy - measure performance
- org structure - accomplish obj
- governing policy - key activities
- responsibility and accountability
- appropriate oversight by mgt (ctrl)
- compensation policies
- reinforcement of an ethical culture
- external and internal auditors
- risk mgt policies and procedures
- disclosure of key info to stakeholders
- oversight related party tran and COI
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provides the structure through which
- the obj of the co are set
- the means of attaining those obj & monitoring perf
Including:
- strategic direction
(corp mission and obj, business model, risk appetite)
- oversight
(risk mgt and ctrl performed by mgt,
internal and external assurance)
Board of Directors
Highest lv of governing body
- to direct and oversee the org's activities
- hold senior mgt accountable
(manager put the int of the shareholder first)
Roles
- oversight function
-> govern the corp to ensure
that all employees perform their job duties in a
legal, ethical, controlled manner to achieve
the org's mission and vision
- fiduciary duties
-> duty of care, no self-dealing, corp opportunities
- legal and ethical obligations
-> oversight role for all of its shareholders and stakeholders
- corporate affairs
-> contact to the outside world, major issues
- unlimited and unrestricted access to info
- understand legal liabilities and handle proper legal actions
- core business knowledge (operations, mkting, financing)
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Responsibilities
- select CEO
- set "tone at the top"
corp culture - comm to all lvs of the org
- approve corp strategy and monitor the
implementation of strategic plans
- set co's risk appetite and oversee
the risk mgt processes
- focus on the integrity and clarity of
the co's fin reporting and other disclosure
- allocate capital
- review, understand, oversee annual
operating plans and budgets
- review the co's plans for business resiliency
- nominate directors and committee member
and oversee effective corp gov
- oversee the compliance program
Management
carries out Board directives
- to achieve corp obj
- perform day-to-day gov functions
Role
- identify risks
- how risks would be managed
- who - risk owners
- reporting of risk mgr activities
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Internal audit's role
performance std 2110 - governance
-> assess and make recommendations to improve corp gov for
- making strategic and operational decisions
- oversee risk mgt and ctrl
- promote app ethics and values within the org
- ensure effective org perf mgt and accountability
- comm risk and ctrl info to app areas of the org
- coordinate the activities and info among
board, in- , external auditors, mgt, other assurance providers
also
- evaluate the design, implementation, and effectiveness of the org's ethics-related obj and activities
- assess whether the info tech gov of the org
support the org's strategies and obj
- conduct a f/u mgt responses to external audit/ regulatory reviews
- support a fraud awareness culture and fraud reporting
Shareholders
owners of a corporation
-> ultimate control over the corporation
-> select the co's BOD
-> no of shares of stock owned = degree of each shareholder's right
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