INTRODUCTION

TO CORPORATE
GOVERNANCE

PREPARED BY: MS. IDA

GOVERNANCE
● Refers to a process whereby elements in society wield power, authority, and
influence to enact policies and decisions concerning public life and social
upliftment
● Means the process of decision making and the process by which decisions are
implemented through the exercise of power and authority by leaders of the
country
CORPORATE GOVERNANCE
● Is the system of rules, practices and processes by which a company is directed
and controlled.
● It identifies
○ Who has power
○ Who is accountable
○ Who makes decisions
● Corporate governance ensures that businesses have appropriate
decision-making processes and controls in place so that the interests of all
stakeholders (shareholders, employees, suppliers, customers and the
community) are balanced.
CHARACTERISTICS OF GOOD GOVERNANCE
● Participation
● Rule of Law
● Transparency
● Responsiveness
● Consensus oriented
● Accountability
● Effectiveness & Efficiency
● Equity & Inclusiveness
OBJECTIVES OF CORPORATE GOVERNANCE
1. transparency and full disclosure
2. accountability
3. equitable treatment of shareholders
4. self evaluation
5. increasing shareholders' wealth
BASIC PRINCIPLES OF CORPORATE
GOVERNANCE
SHAREHOLDERS VS STAKEHOLDERS
RELATIONSHIP WITH SHAREHOLDERS AND
OTHER STAKEHOLDERS
PARTIES INVOLVED IN CORPORATE
GOVERNANCE
1. SHAREHOLDERS

Provide effective oversight through election of board members and

approval of major activities

2. BOARD OF DIRECTORS

Major representative of shareholders to ensure that the organization is run

according to organization’s charter and that their is properly placed
accountability
PARTIES INVOLVED IN CORPORATE
GOVERNANCE
3. NON-EXECUTIVE OR INDEPENDENT DIRECTORS
Same with BOD
4. MANAGEMENT
Operations and Accountability. Manage the organization effectively.
5. AUDIT COMMITTEE OF THE BOD
Provide oversight of internal and external audit function and the processes of
preparing the annual financial statements as well as public reports on internal
control
PARTIES INVOLVED IN CORPORATE
GOVERNANCE
6. REGULATORS
a. Board of Accounting (BOA) - set auditing and accounting standards
b. Securities and Exchange Commission (SEC) - ensure the accuracy,
timeliness, and fairness of public and financial reporting and other
information for public companies
7. EXTERNAL AUDITORS

Perform the audit of company financial statements to ensure that the

statements are free from material misstatements
PARTIES INVOLVED IN CORPORATE
GOVERNANCE
8. INTERNAL AUDITORS

Performs audit of companies for compliance with company policies and laws,
audits to evaluate the efficiency of operations, and periodic evaluation and test
of controls.

- END OF DISCUSSION -