P1 - Session 1 -Corporate Governance

[jrggraham]

Ok, lets get the ball rolling:

the aim is to answer the questions within 24 hours and cover the entire syllabus before exams in June. Today we begin with Board of Directors

Question 1 - Define and Explain the meaning of Corporate Governance
Question 2 - Analyse the purpose and objectives of Corporate Governance

Question 3 - Explain and apply in context of Corporate Governance the key underpinning concepts of:
a) fairness
b) openness/transparency
c) independence
d) probity/honesty
e) responsibility
f) accountability
g) reputation
h) judgement
i) integrity

[jrggraham]

No responses? ok lets break the ice and answer the first question:

Define and Explain the meaning of Corporate Governance

According to the Cadbury Report

Corporate Governance (CG) is the system by which organisations are directed and controlled.

on the other hand the Organisation For Economic Co-operation and Development (OECD) defines Corporate Governance as a set of relationships between an entity's directors, shareholders and other stakeholders.

basically CG enables an entity to have set objectives. CG also determines how to achieve these objectives by monitoring performance.

P1 study group lets give the second question a try:

Question 2 - Analyse the purpose and objectives of Corporate Governance

any takers?:unsure:

[Vivienne]

Hi jrggraham.please hang in there.you are on the right track.if you dont get any response just go aheard .you have the fighting spirit and dont let anyone weigh you down.i tried the same with P2 and it worked for me i managed to clear.

I wrote P1 last sitting but i know i did not clear because i had short time to prepare for it.so for this am not waiting for results am joining you right away.i will be posting the answers for session 1 tomorrow.go aheard and post session 2 questions. we should be able to alternate the questioning at some point.
stay blessed

[jrggraham]

i intend to hang on, as this is a subject i have no tutor for, i am doing a self study

[Admin]

I think its a tad early to start, probably get a better response once the results are out in a couple of weeks and everyone starts to focus on studying again. But no harm in starting early.

[Vivienne]

Question 1

Corporate governance(CG) is the way in which companies are directed are controlled.CG cannot be understood fully without bringing into picture the various codes that have been developed in the recent past.it compels companies to be run in a more orderly manner with directors being open and accountable for all their actions

Question 2
The purpose of CG is to enable companies run in a transparent manner.it also instils some controls in the way companies are run.Controls ultimately lead to accountability and efficient use of the resources of a company.

Question 3
Underpinning concepts of CG

FAIRNESS
This is the taking into account the interest of all stake holders of a company

OPENNESS/TRANSPARENCY
This involves voluntary disclosures of any important matters which will enable stake holders make informed decisions.disclosures of such reports as enviroment,management forecast and cash.

INDEPENDENCE
This borders on the appointment of non executive directors who sholud be free from conflict of interest and thus able to monitor effectively the entity's executive directors activities.

PROBITY/HONESTY
This involves telling the truth and not issuing misleading statements.

RESPONSIBILITY
A system where directors acknowledge their responsibilities and taking corrective action where necessary

ACCOUNTABILITY
Directors are answerable for consequences of their actions to all stakeholders

REPUTATION
Built by directors of companies as a result of their compliance to CG concepts.

JUDGEMENT
Being able to take decisions that will enhance the organisation's prosperity

INTERGRITY
This is a about staright forward dealing.directors exibiting high moral character of trustworthiness


Jrggraham go aheard and post session 2 questions. i will post session 3 .its more fun and encompassing to alternate the asking of questions.CG is a wide topic lets exaust all the areas before we move to the next chapter.

[jrggraham]

just a little addition regarding question 2 - one of the ultimate purpose of CG is to increase share holder's wealth wealth.

[jrggraham]

one more note: students might have a hard time remembering the concepts of CG - i have a mnemonic that will help its HARDRIIFT - if you look closely you will see it

[juliana-ap]

hi guys u can count on me as well!!
Quetion 1

Corporate Governance can be defined as the system through which organisations are directed and controlled and its based on a number of concepts includin transparency, independence, accountability and intergrity.

Question 2

Helps set the relationships between a company and its directors, its shareholders and other stakeholders.it governs the accountability of stewrds towards the stakeholders.

Question 3

FAINESS
Is the aspect of putting through infomation to stakeholders or to teh company from a non bias point of view.

Openness / Transparency
refers to telling it as it is not withholding any important information.

Independence
underpins the independent non- excecutive directors.the separation of interest in the company to that of the director such that it may influence decisions and information distribution.there should not be any conflict of interest and hence the directors will be in a better position to the intersest of the relevant shareholdres and satke holders.

Probity / Honesty
This underpinns telling the truth and carrying yourself in all honesty in the company dealings.

responsibility

Responsible mamangement should do, whatever it takes to set the company on the right path putting in place all the necessary guidelines and corrective measures in place.

Accountability
Directors as stewards are answearble for all the decisions athe y make and actions they take to the shareholders and the stakeholders.

Reputation
this relates to the image of the business dealings.keeping abreast the company's image at all tiems.

Judgement

Refers to Directors making decisions taht enhance the wealth of the shareholdres.

Intergrity
Means the straight forwards dealings and completeness of all information and transactions reflecting honesty and trustworthiness towards all dealings.

[jrggraham]

now on to session 1 part 2