1 Flashcards
Bank-based financial systems
~ prefer little risk
~ less access to investment in physical assets
~ low investment in securities via intermediaries
~ more government regulations
~ banks and businesses highly integrated
Market-based financial systems
~ bear more risk ~ greater access to physical assets ~ high indirect investment via intermediaries ~ comparatively unregulated ~ banks and businesses are less close
5 main principles of Corporate Governance Code 2016
~ Leadership ~ Board effectiveness ~ Accountability/Audit ~ Remuneration ~ Investor relationships
Executive vs non-executive directors
Executive: business operations
Non-executive: challenging board and assisting w/ strategy
Board members should be re-elected…
FTSE 350: every year
Other: Exec: 1st AGM, then every 3 yrs
Non-exec: every year after 9yrs
Committees supporting corporate governance
~ Audit committee
~ Remuneration committee
~ Nomination committee
Audit committee
review FS and recommend external auditors
Remuneration committee
policy on remuneration for exec and non-exec directors
Nomination committee
recommending appointment of exec and non-exec directors
Stewardship Code
principles of good practice on how to engage with companies they invest in + encourage stewardship
Unitary board
responsible for mgt of business and reporting to shareholders
Dual/Supervisory board
roles split between mgt board and supervisory board
Nolan principles (ethics)
Honesty Integrity Accountability Openness Objectivity
Business values
Fairness Responsibility Trust Transparency Truth
Attributes and behaviours of ethical leaders
Fair mindedness Openness Ability to listen Courage Honesty
