- Is a process in which the organization are directed and controlled
- Its oversee the running of the organization by the managers - Ensuring that the interest of all the shareholder are fairly presented and threated Purpose of code corporate gov - To achieve an efficiency corporate governance by threatening self, market discipline, promoting good compliance and corporate governance culture - To strengthening the board structure and composition - to be a way of reducing the chances of governmental legislation being implemented - to encourage best practice and to improve management performance by preventing practice that might reduce value added or shareholder value. - To reduce fraud, waste or inefficiency Comply or explain vs comply or else Comply or explain is a set of guideline in which the company are require to abide with the operating standard or provide an explanation on why they are choosing to not abide with it Comply or else is a set of guideline in which the company are require to abide with the operating standard or will be face the financing penalties Advantage of comply or explain - Can improve the corporation competitiveness because the cost to comply with the corporate governance is lower that the cost to comply with the regulation such as Sarbanes Oxley - Its provide a flexible framework - Can reinforce the standard of good corporate governance - It reduces the costs of compliance and recognizes that one size does not fit all Definition of BOD - Is an individual who oversee the governance of organization - Selected by vote from the shareholder at the annual general meeting - Typically made up of inside or outside members - Inside member can hold a position in the organization while the outside do not involve in the organization - Is the formal link between the shareholder of an organization and the managers entrust to running the operation of the organization - Have a role to oversee the management team, coordinating the interface between the board and the other employees in the company. Argument that support BOD and CEO as an individual merging Argument in favor for the both BOD and CEO is one of the efficiency. By putting the leadership of BOD and senior management in the hand of the same person can reduce the potential of having conflict. It is argued that board are given the benefits of the leadership from someone who are can touch the inner working of the organization rather than the outsider who need time to speed up with it
Whistle blower An employee who discover misconduct or mispractice and he/she decided to bring that matter to the attention of others Internal whistle blower An employee who discover the misconduct or mispractice and decided to bring it to attention of his/her supervisor who then follow the establish procedure to address that misconduct within the organization External whistle blower An employee who discover the misconduct abd decided to bring that matter to attention of law enforcement or the media Ethical whistle blower - When the product or the decision of the company can harm the public and it is break the existing law. The employee should report that misconduct - When the employee confirmed that there have a serious threat harm. - When the employee already bring that matter to the supervisor but there have no action taken. The employee have to follow the internal procedure and address that matter to the attention of BOD 3 consideration to become whistle blower
Mechanism to address the need of whistle blower - Process to document how such complaint are handle - Provide an employee hotline to file such complaint and the company giving an assurance that all the information regarding the whistle blower are confidential - Provide an overall and immediately investigation taken to overcome such complaint - A detail report of all investigation, documenting all corporation officer involved and all action taken.