Review Questions:: "Governance Is Exercised Only by The Government of A Country"

Libiran, Shaina Jane D.C.
Libiran March 26, 2021

BSA 2-3 Governance, Business Ethics, Risk
Management and Internal
Control
REVIEW QUESTIONS:
1. What does governance mean?
Governance is concerned with the structure and processes for the decision-
making, accountability, control and behavior at the top of an entity. Additionally, it
influences how an organization’s goals and objectives are set and achieved, how potential
risks are monitored and addressed and how performances are optimized.
2. Explain whether the following statement is true or false.

“Governance is exercised only by the government of a country”.
The statement is False. Governance is not exclusive and exercised by the

government but beyond that. It is also challenged by the leaders of private or public
institutions or organizations as they also implement rules and procedures for and
controlling and monitoring decisions. Additionally, any organizations such as school,
businesses, hospital, etc. exercised governance by effectively and efficiently allocating
resources to achieve good results, using set of policies, rules and procedures to create a
legacy in the near future.
3. Explain how governance can be used in the following contexts and give appropriate
examples:
a. National Governance
National Governance is the employment of the socioeconomic and sociopolitical

order within a state. It is commonly known but not limited to, the institutions of
government. They have the authority to manage and take responsibility of its
country’s affairs at all levels as well as adhering groups and citizens’ interests,
exercising their legal rights, meeting their obligations and mediating their
differences.
b. Local Governance
Local Governance accountable for the function and decision of a complete range
of services and infrastructure required by their individual communities through
representative of local authorities that are not affiliated with the system of state
government bodies. An example of it is LGUs such as town councils, they derive
their authority from the state that they are situated.
c. Corporate Governance
Corporate Governance is the relationship between company’s shareholders, its

directors and stakeholders as includes the rules and procedures for making and
controlling decisions on corporate affairs to ensure success of its operations while
maintaining the right balance with stakeholder’s interests. The Board of Directors are
accountable for the governance of their companies and they were appointed by
shareholders.
d. International Governance
International Governance involves network and multilevel relations and

interactions to manage and facilitate linkages across policy levels and domains. It
aims political cooperation between nations in the world. Examples of International
Governance are World Bank, United Nations, etc.
4. Explain briefly the eight (8) basic characteristics of good governance.
a. Participation
“Every voice matters.” People should be able to voice their own opinions through
a legitimate immediate representatives or organizations. It also implies freedom of
association and expression moreover as mobilizing people to participate within the
decision-making process. This includes men, women, vulnerable sections of society,
backward classes, minorities, etc.
b. Rule of Law
Good governance ensures impartiality by establishing fair legal framework which

helps to protect human rights, particularly to the most marginal in society that
comprises of poor, disabled, elderly, native/aboriginal or seen as not quite fitting in.
Impartial and independent judiciary system and incorruptible police force are the key
element to ensure the rule of law.
c. Transparency
Governance needs transparency for the fair delivery of services to the citizens.
The information should be accessible to the public, understandable and monitored. It
is the balance between policymaking and its enforcement following proper rules and
regulations.
d. Responsiveness
The ability and effort of an organization to connect, interact cooperatively and

served helpfully their stakeholders. The organization should ensure that their services
are accessible to client, its communication are comprehensible, can empower its
employees and resolve problems immediately or in a reasonable period of time.
e. Consensus Oriented
The Consensus-Oriented decision making ensures that even if everyone does not
achieve what they want to the fullest, a common minimum can be guaranteed to be
fulfilled which will not be detrimental to anyone. Deeper understanding of the
different interests of the stakeholders in order to reach a broad consensus of what is in
the best interest of the entire stakeholder group and how this can be achieved in a
sustainable and prudent manner.
f. Equity and Inclusiveness
A good governance assures an equitable society. The organization that provides

the opportunity for its stakeholders to enhance, improve or maintain their well-being
provides the most compelling message regarding the reason of its existence and value
to the society.
g. Effectiveness and Efficiency
Doing things right and doing the right thing. Organizations should be able to
produce results that meets the need of their community. Maximizing and allocating
resources- human, technological, financial, natural and environment – in a sustainable
way.
h. Accountability
One of the objectives of good governance is betterment of the people and this will
not take place without the government, leaders, private sectors and civil society
organizations being accountable to the people and institutional stakeholders. An
organization should be accountable to those who will be affected by its decisions and
actions.
5. Transparency and accountability are synonymous. Explain whether the statement is

correct or not.
Transparency and accountability are indeed synonymous. Their definitions may
look different but the deeper context of the two words will show how they are connected.
For example, being a transparent organization, it should be able to deliver the services to
the citizens in all honesty as well as can balance between policymaking and its
enforcement following proper rules and regulations. On the other hand, it is accountable
for every actions and rules they make as it will affect them and the citizens. They,
transparency and accountability, both lead to honesty and fairness.
6. Explain whether the following statement is true or false.

“Responsiveness usually results to effectiveness and efficiency”.
The statement, “Responsiveness usually results to effectiveness and efficiency.”,

is correct. When an organization is responsive, it means that it manages to serve all
stakeholders in a reasonable period of time. It is able to became efficient and effective as
they produce results that meets the need and interest of their stakeholders or community.
Being responsive means, they are being effective and efficient as well, however, in some
cases it is not possible. They may be responsive but not doing the right things (efficiency)
or doing things right (effective).
7. Define corporate governance.
Corporate governance aims to achieve organizational objectives of the institution,

not discounting violation to different rules and regulations of different bodies of
authorities as they encourage a trustworthy, moral and ethical environment. The interests
of their stakeholders, shareholders and board of directors are safe-guarded and well-
maintained.
8. What does corporate governance structure involve?
Corporate governance structure involves administration of responsibilities and

rights to its different stakeholders such as shareholders, board of directors, managers or
auditors and justify procedures, rules, practices and processes used to manage and direct
the institution.
9. State the purpose of corporate governance
The purpose of corporate governance is to make a healthy environment, gives a

healthy corporate ecosystem with that of the management and shareholders that is
necessary for stimulating long-term investment, business integrity, financial stability;
supporting growth and more inclusive societies.
10. Explain the basic objectives of corporate governance.
 Fair and Equitable Treatment of Shareholders - treating all shareholders (major and
minor) equitably and protect, recognize and exercise their rights
 Self-Assessment – institutions should assess their behaviors and actions to avoid
mishaps and scrutinization by the regulatory agencies.
 Increase Shareholder’s Wealth – protecting the long-term interests of the shareholders
as well as paying attention to sustainability because it increases the firm’s value.
11. Explain the three basic principles of effective corporate governance.
 Transparency and Full Disclosure – “Is the board telling us what is going on?”.
Corporate governance framework should ensure that timely and accurate disclosure is
made on all material matters regarding the institution, including financial situation,
performance, ownership and governance of the company
 Accountability – “Is the board taking responsibility”. Any discrepancies in the
company accounts or malfunctioning of the company is closely watched by the board
of directors. Shareholders can only hold corporate directors accountable if they know
what is going on at the companies they own.
 Corporate Control – “Is the board doing the right thing?”. Board of Directors and
management are exercising their power to direct the corporate activities and guide the
action of the companies’ bodies.
MULTIPLE CHOICE QUESTIONS
1. D
2. A
3. B
4. A
5. C
6. D
7. B

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Libiran, Shaina Jane D.C.

Libiran March 26, 2021

2. Explain whether the following statement is true or false.

The statement is False. Governance is not exclusive and exercised by the

National Governance is the employment of the socioeconomic and sociopolitical

Corporate Governance is the relationship between company’s shareholders, its

International Governance involves network and multilevel relations and

4. Explain briefly the eight (8) basic characteristics of good governance.

Good governance ensures impartiality by establishing fair legal framework which

The ability and effort of an organization to connect, interact cooperatively and

f. Equity and Inclusiveness

A good governance assures an equitable society. The organization that provides

g. Effectiveness and Efficiency

5. Transparency and accountability are synonymous. Explain whether the statement is

6. Explain whether the following statement is true or false.

The statement, “Responsiveness usually results to effectiveness and efficiency.”,

7. Define corporate governance.

Corporate governance aims to achieve organizational objectives of the institution,

8. What does corporate governance structure involve?

Corporate governance structure involves administration of responsibilities and

9. State the purpose of corporate governance

The purpose of corporate governance is to make a healthy environment, gives a

11. Explain the three basic principles of effective corporate governance.

MULTIPLE CHOICE QUESTIONS

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