 Fairness, transparency, independence, honesty, responsibility, accountability

 Transparency – open and clear disclosure of relevant information

 Voluntary disclosure – disclosure above minimum required
 Agency problem – conflict of interest between owners and managers
 Information asymmetry – strong internal controls to ensure that information
disclosed is reliable
 Innovation – needs of businesses and stakeholders changing overtime
 Comply or explain – comply with code or explain why you don’t comply. Flexibility
offered to companies
 Skepticism – critically assessing evidence. Having a questioning mind
 Avoidance of managerial culture – accepting executive managers views on trust
without analysing and questioning them
 Responsibility – system in place for corrective action and penalizing mismanagement
 Public sector accountability –
 Shareholder theory
 Stakeholder theory
 Instrumental and normative view of stakehodlers
 Instrumental view – organizations mainly have economic responsibilities. Fulfill
responsibilities of stakeholders to maximize profit
 Normative view – organisations have moral duties towards stakeholders. Ethical and
philanthropic responsibilities
 Internal, external
 Legitimate, non legitimate (valid claims)
 Direct and indirect stakeholders (employees, customers direct AND wildlife indirect)
 Recognized and unrecognized stakehodlers
 Narrow and wide stakeholders
 POWER and INTEREST. Mendelow. Matrix. Legitimacy and urgency – power
 Low power, high interest - BOD
 Low power, low interest- migrant workers
 High power, high interest – trade unions, labor unions
 High power, low interest – shareholders
 Regulation. Recently, privatization causing monopolies. So regulation needed to
ensure consumers’ interests
 Institutional investors – have large amounts of money to invest, covered by fewer
protective regulations
 Short termism – tend to seek short term speculative gains or simply sell their shares
 Major issues in corporate governance – role of the board (director duties, fiduciary
duties to act in company’s best interests), composition and balance of board,
reliability of financial reporting and external auditors, directors’ renumeration and
rewards, responsibility of the board for risk management