Key issues in corporate governance

Question 1

What are the key issues in Key issues in corporate governance?

Answer 1

Key issues in corporate governance:

1. Composition of boards
2. Financial reporting
3. Stakeholder relations
4. Corporate culture
5. Social responsibility and sustainability
6. Sexual harassment in the workplace
7. Remuneration of directors and senior executives
8. Shareholder dialogue
9. Performance of directors
10. Risk management
11. Tax planning
12. Technology and information governance

(see pp. 66-70 ICSA Study Text for more details)

Question 2

Issues in developing and emerging markets?

Answer 2

Issues in developing and emerging markets:

Corporate governance issues are different in different countries and countries should adopt governance practices to deal with their specific issues, not just cut and paste frameworks from other countries.

This has happened in the past in an attempt to attract foreign investment.

World Bank Study (2002) found that companies in countries with weak legal and regulatory systems could have a great impact on investor protection by improving their corporate governance practices.

Many organisations that could benefit from some aspects of corporate governance dismiss is because of the term ‘corporate’ and deeming it not to be applicable to them where they are in public or not-for-profit sectors.

Many organisations in developing and emerging countries are either state or family owned and or not listed and this brings governance challenges:

Lack of ownership control by government, no monitoring of management which is often lacking in capability and boards filled with inexperienced directors who would rather be elsewhere,

Conflict in family-owned businesses between controlling family members, informal governance structures and often inexperienced boards and management teams.