1–10: General Corporate Governance
What is corporate governance?
Corporate governance refers to the rules, practices, and processes by which a company is directed and controlled.
Why is corporate governance important?
It ensures accountability, fairness, and transparency in a company’s relationship with stakeholders.
What are the key principles of corporate governance?
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Accountability, transparency, fairness, and responsibility.
What is the role of the board of directors?
To oversee the company’s management, set strategic direction, and protect shareholder interests.
Who are stakeholders in corporate governance?
Shareholders, employees, customers, suppliers, and the community.
What is the difference between shareholders and directors?
Shareholders own the company; directors manage it on behalf of the shareholders.
What are corporate bylaws?
Bylaws are internal rules governing the company’s operations and decision-making processes.
What is the purpose of a shareholder agreement?
To define the rights, responsibilities, and obligations of shareholders, including voting rights and dispute resolution.
What is a corporate charter?
A legal document that creates a corporation and sets out its purpose and structure.
What is a conflict of interest in corporate governance?
A situation where personal interests of directors or executives conflict with their duty to the company.
11–20: Board of Directors and Management
How is a board of directors elected?
Directors are usually elected by shareholders at annual meetings or according to the bylaws.
What is the difference between executive and non-executive directors?
Executive directors are company employees with operational roles; non-executive directors provide independent oversight.
What are the responsibilities of a board chairperson?
To lead the board, facilitate meetings, and ensure effective governance.
What is the role of a corporate secretary?
To ensure compliance with governance requirements, manage board meetings, and maintain company records.
What is board diversity, and why is it important?
Increases diversity by gender, experience and skills, and reflects interests in decision-making of different stakeholders.
What are committees in corporate governance?
Committees such as audit, compensation, and governance focus on specific areas to improve oversight on the work of the board of directors.
Who is an independent director?
A director not having any material relationship with the company, ensuring unbiased decision-making.
How often must the board meet?
A minimum frequency, which in many countries is quarterly or as needed to discuss governance matters.
What is a fiduciary duty?
Directors’ legal duty to act in the best interest of the company and its shareholders.
What is the CEO’s role in corporate governance?
To oversee daily operations while staying aligned with the board’s strategic objectives.
21–30: Governance Practices and Challenges
What is the significance of transparency in corporate governance?
Transparency fosters trust among stakeholders and ensures decisions are made on an informed basis.
How does accountability occur in corporate governance?
Through defined roles, periodic reporting, and ways to measure performance.
What is an audit committee?
A board committee responsible for financial reporting, audits, and internal controls.
What is corporate social responsibility (CSR)?
A company’s commitment to ethical practices, sustainability, and community engagement.
What is ESG in corporate governance?
Environmental, Social, and Governance factors that measure a company’s ethical impact.
How do startups implement corporate governance?
Startups can adopt basic governance practices, such as defining roles, holding meetings, and maintaining transparency.
What is shareholder activism?
Shareholder actions to enforce a change in the behavior or policies of a company.
How do board member disputes get resolved?
Through mediation, arbitration, or as may be provided for under the bylaws or shareholder agreements.
What is governance’s role in risk management?
It encompasses identification, evaluation, and mitigation of risks but also ensures compliance and continuity.
How might a corporation enhance its corporate governance?
Through best practices, an ethos of accountability, and governance policies reviewed periodically.
