Questions

1. What does governance mean?

 Governance is a term commonly used to refer to how public institutions and private
companies conduct their affairs and manage resources. It covers the process of decision-
making as well as the processes by which decisions are implemented.
2. Explain whether the following statement is true or false.
“Governance is exercised only by the government of a country”
 This statement is false because Governance refers to a set of institutions and actors that
are drawn from but also beyond the Government. It challenges the authority of the State
or the Government in the traditional sense and maintains that the Government is not the
only power center of a state. As long as the power exercised by a public or private
institution is recognized by the public, it is possible to become a power center at a specific
level.
3. Explain how governance can be used in the following contexts and give appropriate examples:
a. National Governance
 National governance is broadly defined as the exercise of economic, political and
administrative authority to manage a country’s affairs at all levels, and it comprises
mechanisms, processes and institutions, through which citizens and groups articulate
their interests, exercise their legal rights, meet their obligations and mediate their
differences.

b. Local Governance
 Local Governance means governance or management of local affairs by the people part
of that community.

c. Corporate Governance
 Corporate governance is the system by which companies are directed and controlled.
Boards of directors are responsible for the governance of their companies. The
shareholders' role in governance is to appoint the directors and the auditors and to satisfy
themselves that an appropriate governance structure is in place.
d. International Governance
 International governance is a movement towards political cooperation among
transnational actors, aimed at negotiating responses to problems that affect more than
one state or region. Here are some examples of Institutions of global governance the
United Nations, the International Criminal Court, the World Bank and etc.
4. Explain briefly the eight (8) basic characteristics of good governance.
Participation
All men and women should have a voice in decision-making, either directly or through
legitimate intermediate institutions that represent their interests. Such broad
participation is built on freedom of association and speech, as well as capacities to
participate constructively.
 Rule of law
Legal frameworks should be fair and enforced impartially, particularly the laws on human
rights.
Transparency
Transparency is built on the free flow of information. Processes, institutions and
information are directly accessible to those concerned with them, and enough
information is provided to understand and monitor them.
Responsiveness
Institutions and processes try to serve all stakeholders.
Consensus orientation
Good governance mediates differing interests to reach a broad consensus on what is in
the best interests of the group and,. where possible, on policies and procedures.
Equity and Inclusiveness
All men and women have opportunities to improve or maintain their well-being.
Effectiveness and efficiency
Processes and institutions produce results that meet needs while making the best use of
resources.
Accountability
Decision-makers in government, the private sector and civil society organizations are
accountable to the public, as well as to institutional stakeholders. This accountability
differs depending on the organizations and whether the decision is internal or external to
an organization.

5. Transparency and accountability are synonyms. Explain whether the statement is correct or
not.
 This statement is not correct because the word transparency and accountability have
different meaning and these two basic characteristics of good governance are essential
part of ethical business practice. Disclosure of information and transparent decision-
making processes enable citizens and other stakeholders to scrutinize actions and hold
governments or companies to account.
6. Explain whether the following statement is true or false.
“Responsiveness usually results to effectiveness and efficiency”
 S
7. Define corporate governance.
 Corporate Governance is the collection of mechanisms, processes and relations by which
corporations are controlled and operated.
8. What does corporate governance structure involve?
 Corporate governance is the structure of rules, practices, and processes used to direct
and manage a company. A company's board of directors is the primary force influencing
corporate governance.
9. State the purpose of corporate governance.
 The purpose of corporate governance is to facilitate effective, entrepreneurial and
prudent management that can deliver the long-term success of the company. Corporate
governance is the system by which companies are directed and controlled. Boards of
directors are responsible for the governance of their companies.
10. Explain the basic objectives of corporate governance.
 The fundamental objective of corporate governance is to boost and maximize
shareholder value and protect the interest of other stake holders.
11. Explain the three basic principles of effective corporate governance.
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