Corprate Governance

essayBoard p2.5

p2.4

p2.4  Can be ED or NED with experience and judgement. Key to CG

 Assumes stewardship & powers to manage

 4 responsibilities

* Formulate strategy

* Develop policy

* Appoint/supervise and remunerate other senior executive management

* Ensure accountability

Shareholders p2.5  owners & Directors are accountable to them

 delegate powers to Directors

Stakeholders p2.6

p2.7  Employees/Customers/Suppliers/trading partners/Govt./Community/trading partners

 Commonwealth Association for CG

* Achieve corporate objective;

* Conduct business ethics;

* Legitimate societal interests;

* Influence reputation and long term business enterprise.

3 Investors Types p2.5  Individual/institutional/international shareholders

The principles of 'Effective' CG {See appendix) (pp.2.9-2.18}

OECD

Shareholders' Rights p2.8  The right to sell stock

 The right to vote by proxy

 The right to bring suit for damages

 The right to certain information from the company

The right to certain residual interest following the company's liquidation

OECD

- 5 topics Reading

2.1 1. The rights of shareholders (6 rights)

2. The equitable treatment of shareholders

3. The role of stakeholders in corporate governance

4. Disclosure and transparency

5. The responsibilities of the board

OECD

-6 Shareholders'

Rights p.2.10 1. Secure methods of ownership registration

2. Convey or transfer shares

3. Obtain relevant information on the corporation on a timely and regular basis

4. Participate and vote in general shareholder meetings

5. Elect members of the board

6. Share in the profits of the corporation

OECD

- Stakeholders p.2.12

p.2.12  Employees are most importance

 Rights are protected

 Interests are protected by laws and can be redressed

 Permit performance-enhancing mechanisms for participation

 Access to relevant information

 OECD section 111 perspective

OECD

- Board p.2.13  Strategic guidance of the company

 Effective monitoring of the management of the board

 Board's accountability to the company and shareholders

 Ensure shareholders rights, disclosure and transparency

Combined Code on CG

Combined Code

- Shareholders p.2.10  Should be dialogue between Board and Shareholders

 Board use AGM to dialogue with investors

 Institutional Investors dialogue with companies

 Evaluate governance arrangements in Board structure

Combined Code

- Stakeholders p.2.11  Has no provision relating to Stakeholders hence departure from Hampel Report

Combined Code

- Board Read

2.2  Role and responsibilities of Board

 Clear division and powers of CEO and Chairman

 Board Balance of ED, NED, independent and non domineering directors

 Appointments be formal, transparent and rigorous procedure

 Information and professional development be timely and on going

 Performance evaluation to be annual

 Re-election be progressive and interval and proper planning

 Remuneration be attractive

 Financial Reporting and sound Internal control systems

 Audit committee and relationship with auditors

ASX

ASXCG

- Shareholders p.2.11  Respect the rights of the shareholders

 Facilitate the effective exercise of those rights

 Communicate effectively with them

 Give them access to balance and understandable information and proposals

 Making it easy for them to participate in meetings

ASXCG

- Stakeholders p.2.12  Recognize legal and other obligations to them

 Create value by better managing natural, human, social and capitals

ASXCGC

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