Chapter 1 Flashcards
It refers to a process whereby elements in society willed power authority and influence and enough policies and decisions concerning public life and social upliftment
Process of decision making and the process by which decisions are implemented or not through the exercise of power or authority
Governance
What are the characteristics of good governance?
Participation
Effectiveness and efficiency
Rule of law
Accountability
Consensus oriented
Equity and inclusiveness
Responsiveness
Transparency
__ by both men and women is a key cornerstone of good governance.
It could be either direct or through legitimate institution or representatives
Freedom of association and expression on one hand & organized civil society on the other hand
Participation
It requires fair legal frameworks that are enforced impartially.
Requires full protection of human rights
Impartial enforcement require independent judiciary and an impartial and incorruptible police force
Rule of law
It means that the decision taken and their enforcement are done in a manner that follows rules and regulations
Information is freely available to those who will be affected by decision. Provided in easily understandable forms and media
Transparency
It requires that institutions and processes try to serve the needs of all stakeholders within reasonable time frame
Responsiveness
Requires mediation of different interest in society to reach a broad consensus on what is best interest of the full community and how it can be achieved
Requires broad long term perspective needed for sustainable human development and how to achieve.
Can only result understanding of historical cultural and social context of society
Consensus oriented
Ensure all member feel that they have a stake and in it and do not feel excluded from the mainstream of society
Vulnerable have opportunities to improve or maintain well-being
Equity and inclusiveness
Good governance means processes and institutions produce results that meet the need of society while making the best use of resources at their disposal
Sustainable use of natural resources and protection of environment
Effectiveness and efficiency
It is the key requirement of good governance.
An organization or an institution is ___ to those who will be affected by its decisions or actions.
It cannot be enforced without transparency and the rule of law
Accountability
Is defined as the system of rules practices and processes by which business corporation are directed and controlled
Balancing the interest of stakeholders of a company
Specify the distribution of rights and responsibilities among different participant in corporation
Corporate governance
What is the purpose of corporate governance?
Increase shareholders wealth sustainably over the long term while at the same time protecting the interest of other stakeholders by improving corporate performance and accountability
Enhance shareholders value and protect the interest of other stakeholders by improving the corporate performance and accountability.
To facilitate effective entrepreneurial and prudent management that can deliver long term success of the company
Objectives of corporate governance
A. Fair and equitable treatment of shareholders
B. Self assessment
C. Increase shareholders wealth
D. Transparency and full disclosure
Basic principles of effective corporate governance
- Transparency and full disclosure- is the board telling us what is going on
- Accountability- is the board taking responsibility
- Corporate control- is the board doing the right thing
Effective corporate governance is…
Transparent protect the rights of shareholders and include both strategic and operational risk management. It concern both long term and short term potential earnings and hold directors accountable for stewardship of business.
Does the board met the information need of investment communities?
Does it safeguard integrity and financial reporting?
Does the board have sound disclosure policies and practices?
Does it make timely and balance disclosure?
Can outsider meaningfully analyze the organization action and performance?
Transparency and full disclosure
Does the board clarify its role and that of management?
Does it promotes objective ethical and responsible decision making?
Does it lay solid foundation for management oversight?
Does the composition makes of board membership ensure appropriate range and mix of expertise diversity knowledge and added value
Is organization senior official committed to widely accepted standards of correct and proper behavior
Accountability
Balance scorecard
Objective
Strategy
Targets
Measure
