Major Characteristics of A Good Governance

UNIVERSITY OF BOHOL
COLLEGE OF BUSINESS AND ACCOUNTANCY
Name : Cheenee P. Peligro

Course and Year: BSA-3
Subject: ACCTG. 10N
Date: April 7, 2021
TOPIC 1
1. What is governance?
Governance is the system or method of controlling and managing a certain organization.

This encompasses policies, procedures and rules which will direct how the organization
should behave. It is the way how the organization will work and run which will affect its
performance either positive or negative. It involves relationship between management
and the person in charge in governing. It comprises all the process of governing.
2. Enumerate and explain the characteristics of a good governance.
Good corporate governance leads to a positive performance and sustainable business.

Good governance indicates that an organisation is well managed and that the interests of
management are aligned with other stakeholders. It gives the company or organization a
competitive advantage.
Major Characteristics of a good Governance:
 Participation- One of the best practices for good governance is to include and appreciate
multiple perspective in the management or board. Strong, well-composed boards include
a variety of people, skills, talents, abilities, experiences and perspectives. Boards should
expect all of their members to participate in board meetings, and board chairs should
facilitate meetings in ways that draw out the perspectives of all board directors, especially
the quiet ones.
 Consensus-Oriented - Representatives from many different walks of life come together
with varying perspectives which may result to serious debates. After serious diccussions
comes with the best decision. The best interests of communities and companies comes
first in consensus of boards.
 Accountability- This is key governance best practice in all areas. Board of directors,
managers and the government official are accountable to individuals and people who get
Transparency and the rule of law go hand-in-hand with accountability.
 Transparency- One of the requirements of a good governance is transparency. Records
and process must be available and presented to other members or shareholders and
stakeholders in a way that thy can understand. Records should not be inflated or
exaggerated.
 Responsiveness- People who practice good governance must give time to provide honest
answers to the queries and better communicate to shareholders and stakeholders within an
acceptable time.
 Effectiveness and Efficiency – A good governance ensure that the processes produce the
best result which are beneficial to the people as well as the environment. They must
wisely use their resources and produce the best output.
 Equity and Inclusiveness- All members must feel that they have equal rights and that they
are included. Each member should use their voice to share their experiences, opinions
and philosophies to enhance and broaden discussions. No one should feel left out or feel
that their opinions have less meaning than others.
 Rule of Law - The rule of law means boards should be fair and impartial in their
collaborations and in their decision-making. Good corporate governance requires boards
to act ethically, honestly and with the utmost integrity.
 Strategic Vision- One of the primary responsibilities of board directors is strategic
planning, which includes the mission, vision and values statements.
3. What is Corporate Governance and its purpose?
Corporate Governance is the system of stewardship and control to guide organization in

fulfilling their long-term economic, moral, legal, and social obligations towards their
stakeholders (SEC Memorandum Circular 19, s. 2016). From the given definition above
corporate governance is the leadership and direction given to a company to achieve its
goals and objective which will benefit all the stakeholders.
The purpose of corporate governance is to effectively and efficiently direct and control
the company in order to achieve its goals and long-term success of the company. This
also protect the interest of their stakeholders by improving their performance and make
sure that everything is under control.
4. Explain the objectives of Corporate Governance.
There are four basic objectives of Corporate Governance. These are the following:
 Fair and Equitable Treatment of Shareholders – A corporate governance must
make sure that all Shareholders are treated equally. The rules and decisions must
be fair for all the shareholders and they must practice same rights in decision
making process of the company.
 Self-Assessment – Corporate governance must enable firm to identify their
deficiency and assess their performance before being scrutinized by regulatory
agency.
 Increase Shareholders’ Wealth- This is another objective of the company which
is to protect the interest of its shareholders and to make sure that the company is
operating well. This will also attract more investors.
 Transparency and Full Disclosure- A good corporate governance will ensure
transparency by encouraging the full disclosure of company’s transactions within
its account.
5. Explain the basic principles of Effective Corporate Governance.
Effective corporate governance is carried out in accordance with the Company's

Corporate Governance Code and is based on the following principles:
 Transparency and full disclosure- Effective corporate governance is transparent in

a way that the board or management doesn’t hide anything and must clearly
present all those records and transactions of the company to its shareholders and
other interesting party.
 Accountability- The directors must hold accountable in managing the company.
They must be responsible to the people that are affected by their decisions, and
action.
 Corporate control- The board must make a rightful decisions and actions which
enhances the company. The must make sure everything they do is right and on
track.

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UNIVERSITY OF BOHOL

COLLEGE OF BUSINESS AND ACCOUNTANCY

Name : Cheenee P. Peligro

Governance is the system or method of controlling and managing a certain organization.

2. Enumerate and explain the characteristics of a good governance.

Good corporate governance leads to a positive performance and sustainable business.

Major Characteristics of a good Governance:

3. What is Corporate Governance and its purpose?

Corporate Governance is the system of stewardship and control to guide organization in

4. Explain the objectives of Corporate Governance.

5. Explain the basic principles of Effective Corporate Governance.

Effective corporate governance is carried out in accordance with the Company's

 Transparency and full disclosure- Effective corporate governance is transparent in

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