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    Govbusman Chapter 2 Reviewer

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    Govbusman Chapter 2 Reviewer

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    GOVBUSMAN-CHAPTER-2-REVIEWER

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    GOVERNANCE, BUSINESS ETHICS, RISK MANAGEMENT AND INTERNAL CONTROL

    (GOVBUSMAN)
    2nd Semester | A.Y. 2023-2024 | CHAPTER 2: CORPORATE GOVERNANCE RESPONSIBILITIES AND ACCOUNTABILITIES

    PARTIES INVOLVED IN CORPORATE GOVERNANCE: THEIR


    CORPORATE GOVERNANCE RESPONSIBILITIES AND
    RESPECTIVE BROAD ROLE AND SPECIFIC RESPONSIBILITIES
    ACCOUNTABILITIES
    • Shareholders - Provide effective oversight
    • “There is no simple universal formula for good
    through election of board members, approval of
    governance.”
    major initiatives such as buying or selling stock,
    • Organizations are encouraged to give
    annual reports on management compensation
    appropriate attention to the principles and adopt
    from the board.
    approaches which are tailored to the specific
    • Board of Director’s - The major representatives
    needs of an organization at a given point in time.
    of stockholders to ensure that the organization is
    • The essence of any system of good governance is
    run according to the organization’s charter and
    to allow the board of directors and management
    that there is proper accountability.
    the freedom to drive their organization forward
    • Non-Executive or Independent Directors – The
    and to exercise that freedom within a framework
    same as the board role of the entire board of
    of effective accountability.
    directors.
    BOD AND MANAGEMENT ACCOUNTABILITY • Management – Operations and accountability.
    • Financial performance - It is a complete Manage the organization effectively; provide
    evaluation of a company’s overall standing in accurate and timely reports to shareholders and
    categories such as assets, liabilities, equity, other stakeholders.
    expenses, revenue, and overall profitability. It is • Audit Committees of the Board of Directors -
    measured through various business-related Provide oversight of the internal and external
    formulas that allow users to calculate exact audit function and the process of preparing the
    details regarding a company’s potential annual financial statements as well as public
    effectiveness. reports on internal control.
    • Financial transparency – financial statements • Regulators
    that are clear with full disclosure and that reflect a. Board of Accountancy - Set accounting and
    the underlying economics of the company. auditing standards dictating underlying
    • Stewardship - how well the company protects financial reporting and auditing concepts; set
    and manages the resources entrusted to it. the expectations of audit quality and
    - an ethical value that embodies the responsible accounting quality.
    planning and management of resources. b. Securities and Exchange Commission -
    • Quality of internal control – the level of Ensure the accuracy, timeliness and fairness
    mechanisms, rules, and procedures of public reporting of financial and other
    implemented by a company to ensure the information for public companies.
    integrity of financial and accounting information, • External Auditors - Perform audits of company
    promote accountability, and prevent fraud. financial statements to ensure that the
    Enron Case - Enron Scandal - The Fall of statements are free of material misstatements
    a Wall Street Darling including misstatements that may be due to
    • Composition of the board of directors and the fraud.
    nature of its activities - Includes information on • Internal Auditors - Perform audits of company
    how well management incentive systems are for compliance with company policies and laws,
    aligned with the shareholders’ best interests. audits to evaluate the efficiency of operations
    and periodic evaluation and tests of controls.

    DE LOS REYES, JASMIN C. | 1

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