Module 3 Part D

Question 1

G20/OECD principles of corporate governance

Answer 1

Written for government
Provide guidance to policy makers, companies and investors
It was 1st issued in 1999
The 6 key principles
1. Ensuring the basis for effective corporate governance framework
2. rights and equitable treatment of shareholders
3. Institutional investors, stock market and other intermediaries
4. disclosure and transparency
5. the responsibilities of board
6. sustainability and resilience.
These principles are important for 3 main reasons
1. Climate change requires companies to think long term and be transparent. The companies should support for climate and other sustainability changes.
2 companies with good governance benefit from investors and market confidence and trust and support long-term investment in companies
3. Solid framework to protect investors, including household and pension investors

Question 2

UK FRC Corporate Governance code

Answer 2

Use Anglo-American codes model
This code takes comply and explain approach
5 broad categories and these categories are broken down into 18 principles 41 provisions
1. Borad leadership and control- focuses on long-term sustainability of the company
and companies values and culture
2. Division of responsibilities- looks at the roles of board members, including chars, executive-directors & non-executive-directors
3. Composition, succession and evaluation-details the role of nominated committee, appoints and diversity
4. Audit, risk and internal control-roles of audit committee. Looks at risk identification and management
5. remuneration- looks at remuneration policies and role of remuneration committee

Question 3

ASX Codes

Answer 3

Rules and regulations are for only listed companies
8 principles
1. Lay solid foundations for management and oversight
2. Structure the board to be effective and add value
3. Instill a culture to act lawfully, ethically and responsibly
4. safeguard the integrity of corporate reports or integrity in reporting
5. Make timely and balanced disclosure
6. Respect the rights of security holders
7. Recognise and manage risk
8. Remunerate fairly and responsibly