Governance and Ethics Flashcards
What are the impacts of poor governance
Falling share prices
Corporate failure
Criticism of accountants or auditors
What is the agency relationship
Directors/Managers pursuing their own interests instead of those of the shareholders
What are the four different perspectives on corporate governance
Public policy perspective (widest view)
Stakeholder perspective
Corporate perspective
Stewardship perspective (narrowest view)
What are the three elements of a financial system
Intermediaries (Banks, pension funds, trusts)
Securities (Shares and bonds)
Markets (Primary, secondary, capital and money)
What are the characteristics of a bank based financial system
Bank lending is most important
Stock markets are volatiles
More government regulations
Households bear less risk
What are the characteristics of a market based financial system
Markets are more important
Stock markets are more efficient
Markets are less regulated
Households bear more risk
What are the six elements of Hofstede’s national culture and governance model
Power distance Uncertainty avoidance Individualism and collectivism Masculinity/Femininity Long term orientation Indulgence versus restraint
What are the two approaches to governance structures
Principles based approach
Shareholder led approach
What are the two types of board structure
Unitary Board Dual Board (Split into Management and Supervisory)
Under what conditions do large private companies have to comply with The Companies Regulations (2018)
More than 2000 employees worldwide >200m turnover globally Total assets (SFP) > £2bn
What are Nolan’s five principles on ethics
Integrity Objectivity Accountability Openness Honesty
What are the Institute of Business Ethics (IBE) five principles on ethics
Respect Transparency Fairness Responsibility Trust
