Corporate Governance Pillars

Helping Students understand corporate Practices
It integrates all the participants involved in a process, which is economic, and at

the same time social. The fundamental objective of corporate governance is to
enhance shareholders' value and protect the interests of other stakeholders by
improving the corporate performance and accountability. The three
major players are management, directors and shareholders. They form what is
commonly referred to as the "corporate governance triangle."
The three pillars of corporate governance are: transparency, accountability, and

security. All three are critical in successfully running a company and forming solid
professional relationships among its stakeholders which include board directors,
managers, employees, and most importantly, shareholders.
Corporate Governance will help establish a clear skill set for scholars allowing
them to reconcile external and internal controls, risk management, competitive
behavior and adherence to corporate law. The course provides candidates with
sound theoretical and practical understanding of corporate governance particularly
on financial decision making, accountability and reporting.
In addition, the course gives candidates an understanding of behaviors and

performance of different types of organization, an appreciation of strategic issues
facing an organization, including the strategic elements of corporate finance to
make the students familiarize with investment, financing and dividend decisions
and the policy formulation to address the challenges of business today.

Topics covered

 Corporate governance issues, concepts and domain.
 External governance – law and regulation.
 Codes of 'best practice' and norms of behavior.
 Boards of directors: the lynchpin.
 Internal controls and accountability.
 Risk management.
 Financial market supervision and control.
 Governance and financial market economics.
 External reporting need vs. delivery.
 Definition inconsistency and system improvement.
 Reality in the face of prescription.
Corporate governance. Corporate governance is the collection of mechanisms,
processes and relations by which corporations are controlled and operated. ...
These include monitoring the actions, policies, practices, and decisions of
corporations, their agents, and affected stakeholders.
The internal governance mechanisms primarily focus on boards of directors,

ownership and control, and managerial incentive mechanisms, whereas the
external governance mechanisms cover issues related to the external market and
laws and regulations (e.g., the legal system).
The result of showed that internal corporate governance mechanism represented
by Ownership Structure, Board of Directors, Management Remuneration, Internal
Control & Audit and Transparency & Disclosure have a great effect on corporate
performance.
Eight Elements of Good Corporate Governance
 Rule of Law. Good governance requires fair legal frameworks that are enforced by
an impartial regulatory body, for the full protection of stakeholders.
 Transparency. ...
 Responsiveness. ...
 Consensus Oriented. ...
 Equity and Inclusiveness. ...
 Effectiveness and Efficiency. ...
 Accountability. ...
 Participation.
Eight Elements of Good Governance
Good governance has 8 major characteristics. It is participatory, consensus

oriented, accountable, transparent, responsive, effective and efficient, equitable and
inclusive, and follows the rule of law. Good governance is responsive to the
present and future needs of the organization, exercises prudence in policy-setting
and decision-making, and that the best interests of all stakeholders are taken into
account.
1. Rule of Law
Good governance requires fair legal frameworks that are enforced by an impartial
regulatory body, for the full protection of stakeholders.
2. Transparency
Transparency means that information should be provided in easily understandable
forms and media; that it should be freely available and directly accessible to those
who will be affected by governance policies and practices, as well as the outcomes
resulting therefrom; and that any decisions taken and their enforcement are in
compliance with established rules and regulations.
3. Responsiveness
Good governance requires that organizations and their processes are designed to
serve the best interests of stakeholders within a reasonable timeframe.
4. Consensus Oriented
Good governance requires consultation to understand the different interests of
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.
5. Equity and Inclusiveness

The organization that provides the opportunity for its stakeholders to maintain,
enhance, or generally improve their well-being provides the most compelling
message regarding its reason for existence and value to society.
6. Effectiveness and Efficiency

Good governance means that the processes implemented by the organization to
produce favorable results meet the needs of its stakeholders, while making the best
use of resources – human, technological, financial, natural and environmental – at
its disposal.
7. Accountability
Accountability is a key tenet of good governance. Who is accountable for what
should be documented in policy statements. In general, an organization is
accountable to those who will be affected by its decisions or actions as well as the
applicable rules of law.
8. Participation
Participation by both men and women, either directly or through legitimate
representatives, is a key cornerstone of good governance. Participation needs to be
informed and organized, including freedom of expression and assiduous concern
for the best interests of the organization and society in general.
Towards Improved Governance:

Good governance is an ideal which is difficult to achieve in its totality.
Governance typically involves well-intentioned people who bring their ideas,
experiences, preferences and other human strengths and shortcomings to the
policy-making table. Good governance is achieved through an on-going discourse
that attempts to capture all of the considerations involved in assuring that
stakeholder interests are addressed and reflected in policy initiatives.
There are four broad theories to explain and elucidate corporate governance.
These are: (i) Agency Theory; (ii) Stewardship Theory; (iii) Stakeholder Theory;
and (iv) Sociological Theory.
To improve, governance, here are five basic steps:
1. Increase Diversity. Corporate boards suffer from a serious lack of

diversity. ...
2. Appoint Competent Board Members. ...
3. Ensure Timely Information. ...
4. Prioritize Risk Management. ...
5. Evaluate Board Performance.

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Helping Students understand corporate Practices

It integrates all the participants involved in a process, which is economic, and at

The three pillars of corporate governance are: transparency, accountability, and

In addition, the course gives candidates an understanding of behaviors and

The internal governance mechanisms primarily focus on boards of directors,

Eight Elements of Good Corporate Governance

Eight Elements of Good Governance

Good governance has 8 major characteristics. It is participatory, consensus

5. Equity and Inclusiveness

6. Effectiveness and Efficiency

Towards Improved Governance:

To improve, governance, here are five basic steps:

1. Increase Diversity. Corporate boards suffer from a serious lack of

2. Appoint Competent Board Members. ...

3. Ensure Timely Information. ...

4. Prioritize Risk Management. ...

5. Evaluate Board Performance.

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