This document discusses corporate governance, including its definition, importance, parties involved, pillars, and key elements. Corporate governance is about ensuring companies are properly managed and run in a way that is accountable to shareholders. The main pillars are fairness, accountability, transparency, and independence. Key elements include well-defined shareholder rights, board commitment, strong control environments, transparent disclosure practices, and good board processes. Overall, corporate governance promotes long term company performance and reduces business risks and scandals.

1. Corporate Governance

2. Contents
Corporate Governance – Overview
Corporate Governance – Pillars
Corporate Governance - Elements

3. Corporate Governance - Overview

4. Why Corporate Governance?
• Better access to external finance
• Lower costs of capital – interest rates on loans
• Improved company performance – sustainability
• Higher firm valuation and share performance
• Reduced risk of corporate crisis and scandals

5. Corporate Governance - Parties
• Share holders – Those that own the company
• Manager - Guardians of the Company’s assets for the
Shareholders
• Directors - Who use the Company’s assets

6. Owner
Board of Directors
CEO
Executives
Employees

8. Corporate Governance is NOT
• Corporate governance ≠ corporate / financial
management
• Corporate governance ≠ corporate social responsibility
or business ethics

9. What is Corporate Governance?
• If management is about running the business, corporate
governance is about seeing that it is run properly.
• All companies need managing and governing.

10. Corporate Governance – Pillars

11. Pillars of Corporate Governance
Fairness
Accountability
Transparency
Independence
Corporate
Governance

12. • Accountability
– Ensure that management is accountable to the Board
– Ensure that the Board is accountable to shareholders
• Fairness
– Protect Shareholders rights
– Treat all shareholders including minorities, equitably
– Provide effective redress for violations

13. • Transparency
– Ensure timely, accurate disclosure on all material
matters, including the financial situation,
performance, ownership and corporate
governance
• Independence
– Procedures and structures are in place so as to
minimise, or avoid completely conflicts of interest
– Independent Directors and Advisers i.e. free from
the influence of others

14. Corporate Governance – Elements

15. Corporate Governance - Elements
Elements
Well Defined
share holders
rights
Board
Commitment
Control
Environment
Transparent
Disclosure
Good Board
Practice

16. Good Board Practices
• Clearly defined roles and authorities
• Duties and responsibilities of Directors understood
• Board is well structured
• Appropriate composition and mix of skills
• Appropriate Board procedures
• Director Remuneration in line with best practice
• Board self-evaluation and training conducted

17. Control Environment
• Internal control procedures
• Independent audit committee established
• Risk management framework present
• Internal Audit Function
• Disaster recovery systems in place
• Management Information systems established
• Media management techniques in use
• Compliance Function established
• Business continuity procedures in place
• Independent external auditor e conducts audit

18. Transparent Disclosure
• Financial Information disclosed
• Non-Financial Information disclosed
• Financials prepared according to International
Financial Reporting Standards (IFRS)
• Companies Registry filings up to date
• High-Quality annual report published
• Web-based disclosure

19. Well-Defined Shareholder Rights
• Minority shareholder rights formalised
• Well-organised shareholder meetings
conducted
• Policy on related party transactions
• Policy on extraordinary transactions
• Clearly defined and explicit dividend policy

20. Board Commitment
• The Board discusses corporate governance issues and has created a
corporate governance committee
• The company has a corporate governance champion
• A corporate governance improvement plan has been created
• Appropriate resources are committed to corporate governance initiatives
• Policies and procedures have been formalised and distributed to relevant
staff
• A corporate governance code has been developed
• A code of ethics has been developed
• The company is recognised as a corporate governance leader