Corporate Governance Flashcards
1
Q
Board and senior management objectives on corporate governance
A
- set strategy and objectives
- Risk tolerance determined
- operate business
- protect interest of stakeholders
- safety and soundness of business
2
Q
Corporate governance / board of directors
A
Does not support the board of directors remuneration
3
Q
Two types of corporate governance structures
A
- Unitary Board
- Two Tier structure
4
Q
Unitary board
A
One board of Directors
- Executive and non executive directors on single board
- Board elected by shareholders
5
Q
Unitary board common in
A
US and UK
6
Q
Two tier structure
A
Supervisory and managerial board separate
- Supervisory elected by shareholders
- Managerial board appointed by supervisory board
7
Q
Two tier structure common in
A
Europe - Germany
Except Belgium
8
Q
Management structures on compliance function
A
Matrix structure
Silo structure
9
Q
Matrix Structure
A
- Powerful Compliance offer sits on board of directors
- Centralised compliance roles report to compliance officer
- business units may have compliance managers (report compliance officer )
10
Q
Silo structure
A
- all business unit has completely separate compliance function
- Leads to replication of functions and could lead to inconsistency of reporting
11
Q
BIS
A
Bank for International Settlements
12
Q
Basel committee issues on Banking Supervision
A
- Board involved approving bank strategy
- Clear lines of responsibility
- Compensation policies consistent with bank objective
- Risks monitored that lack transparency
13
Q
Board & Corporate Governance
A
- Board have overall responsibility
- Qualified and understand role
- Definite corporate governance practices
- Board of parent company overall responsibility for entities
14
Q
Senior Management & Corporate Governance
A
Implement what the board sets out
15
Q
Risk Management & Corporate Governance
A
- Independent risk function
- Risks should be identified and monitored
- Firm wide communication
- Board and senior management should effectively audit and control functions manage risk
