Corporate Governance and Systems Integration Flashcards
What is the purpose of corporate governance?
Provide a framework and guideline as to how the organisation is managed and controlled
Sets out responsibilities, practices, principles and processes - best interest of stakeholders
According to Johnson, Scholes and Whittington, what is the definition of corporate governance?
Concerned with the structures and systems of control by which managers are accountable to those who have legitimate stake in the organisation
What is the Sarbanes-Oxley Act 2002?
It sets out clear standards for company boards - it aimed to improve financial disclosure with organisations. SOX came about due to high profile cases in the USA
What are the 2 important elements of segregation of duties
Non-executive directors - impartial view and bring skills to exec board
Transactions - ensuring no one person is able to transact an entire business process without proper checks
Name 4 ethical practices
Customers - fair treatment, safe quality products
Suppliers - transparent, equal, respectful, fulfil obligations
Corruption - fraud, bribery corruption must be avoided
Conflict of interest - must be declared
Staff - fairly, equality and respect
Finance - financial responsibilities must be met
What are the two main methods that can be implemented to detect ethics breaches?
Whistleblowing - should be supported by all orgs
Ethics audit - part of supplier relationship management, regular review
What are the steps an organisation should take if an ethical breach has been detected?
Gather evidence
Establish the severity
Escalate to senior staff and the PR team
Identify how breach occurred and draw up action plan
What things can be implemented to avoid potential future ethical breaches?
Training and education
Ethically focused performance measures (staff and suppliers)
What is a system?
a set of principles or procedures according to which something is done; the focus is on meeting a desired outcome
Systems need to be continually monitored to ensure that they are continually delivering business benefit
Describe what a control system does?
Captures control data and feeds it back to the system for analysis where it can be acted upon
What’s the difference between control environment and control procedures?
Control environment - reflect orgs values and cultures and the style and attitudes of management
Control procedures - individual control mechanisms, budgets, segregation of duties, FALs
What are the 2 types of system integration?
System integration - bringing all systems together into one value adding system
Vertical integration - integrating sub systems according to functionality
Horizontal integration - integrating different sub systems which span functions, e.g. ERP systems, manage info across entire org
What are the 2 options you can use when integrating systems across supply chains?
Option 1 - create one system with all data stored centrally
Option 2 - create a network of interfacing, but separate systems - real time data exchange
name 5 benefits of good corporate governance
increased market value, Improved credit rating, attractiveness to new investors, higher credibility, attractiveness as an employer, compliance and reputation
what are the key principles ethical sourcing supports
freedom of association, collective bargaining, elimination of forced labour, elimination of child labour, elimination of discrimination
