Handout 3

Question 1

Is a system by which
companies are directed and controlled. The
primary purpose of CG is to monitor those
parties within a company that controls the
resources owned by investors.

Answer 1

Corporate Governance

Question 2

Two approaches in corporate governance

Answer 2

• Rules-Based Approach
• Principle-based Approach

Question 3

Based on the view that companies must be required by law to comply with established principles of good corporate governance.

Answer 3

Rules-Based approach

Question 4

It is based on the view that a single set of rules is inappropriate for every company. Circumstances and situations differ between companies.

Answer 4

Principle-based Approach

Question 5

Includes expectations and defines acceptable behaviors. It differs from a code of ethics in that it contains
information pertinent to the individual and their action on the job but may collect detailed offshoot information from the company’s ethics code.

Answer 5

Employee Code of Conduct

Question 6

Develop and maintain a standard of
conduct that is acceptable to the
company, its vendors, customers,
and other employees.

Answer 6

Purpose

Question 7

Must include general clauses of
adherence to company policies
and ethics to keep it simple.

Answer 7

Blanket

Question 8

Signed employee codes of conduct can be considered a legal document, they can be used as a disciplinary or legal action tool for employee infractions.

Answer 8

Disciplinary/legal
tool

Question 9

Create with language that is as clear
as possible. Examples may include
prohibitions on illegal activities,
smoking, drinking, foul language,
discrimination, and harassment.

Answer 9

Information