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Gerente Module 1 Activity (Governance)

The document discusses key concepts of corporate governance including defining it as the system of rules and processes by which companies are governed. It explains that corporate governance structure determines the distribution of rights and responsibilities in an organization. The basic objectives of corporate governance are listed as transparency and full disclosure, increasing shareholder wealth, self-assessment, and fair treatment of shareholders. The three basic principles of effective good governance are stated as transparency and disclosure, accountability, and corporate control. The statement "Responsiveness usually results to effectiveness and efficiency" is assessed to be true as responsiveness of stakeholders is important to achieve objectives that lead to good, effective, and efficient outcomes for a company.

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Aldrin Gerente
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212 views2 pages

Gerente Module 1 Activity (Governance)

The document discusses key concepts of corporate governance including defining it as the system of rules and processes by which companies are governed. It explains that corporate governance structure determines the distribution of rights and responsibilities in an organization. The basic objectives of corporate governance are listed as transparency and full disclosure, increasing shareholder wealth, self-assessment, and fair treatment of shareholders. The three basic principles of effective good governance are stated as transparency and disclosure, accountability, and corporate control. The statement "Responsiveness usually results to effectiveness and efficiency" is assessed to be true as responsiveness of stakeholders is important to achieve objectives that lead to good, effective, and efficient outcomes for a company.

Uploaded by

Aldrin Gerente
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Gerente, Aldrin P. Oct.

21,2020
2BSA-3 Mr. Escoses
GOVERNANCE, BUSINESS ETHICS, SOCIAL RESPONSIBILITY AND INTERNAL
CONTROL

Chapter 1 (Exercise)

1. Define corporate governance.


- In the business context, it refers to the system of rules, practices, and
processes by which companies are governed. It is all about controlling one’s
business and so is relevant for all organizations.

2. What does corporate governance structure involve?


- The structure of corporate governance determines the distribution of rights
and responsibilities between the different parties in the organization and sets
the decision-making rules and procedures. It is usually up to the management
board to decide how the company will develop.

3. State the purpose of corporate governance?


- The purpose of corporate governance is to help build an environment of trust,
transparency and accountability necessary for fostering long-term investment,
financial stability and business integrity, thereby supporting stronger growth
and more inclusive societies.

4. Explain the basic objectives of corporate governance.

a. Transparency and Full Disclosure


- It ensures that the organization will have a high degree of transparency
by encouraging full disclosure of transactions in company accounts.
b. Increase Shareholder’s Wealth
- Its main objective is to protect the long-term interest of shareholders.
This only reflects that positive perception of corporate governance will
make potential investors to invest in a company or an organization.
c. Self-Assessment
- It enables firms to assess their behavior and actions before they are
scrutinized by regulatory agencies. Having a strong corporate
governance system will limit an organization from exposure of
regulatory risks and fines.
d. Fair and Equitable Treatment of Shareholders
- It ensures equitable and fair treatment of all shareholders of the
company. The equity will be safeguarded by good governance
structure in an organization.

5. Explain the three basic principles of effective good governance.

a. Transparency and Full Disclosure


- Companies that have an effective corporate governance structure in
place know that transparency must be a core principle. Also, the
organization must have sound disclosure policies/practices and must
safeguard integrity in financial reporting.
b. Accountability
- Good corporate governance ensures stakeholders know that the
company’s mission, values, short and long-term strategic goals must
be accomplished for the benefit of the company.
c. Corporate Control
- It ensures that an organization must recognize some risks and
remunerate fairly and responsibly.

Explain whether the following statement is true or false.

“Responsiveness usually results to effectiveness and efficiency”

- In my opinion, I think this statement is TRUE. It is true that responsiveness


usually results effectiveness and efficiency. The responsiveness of
stakeholders is important in order to do our objectives that will make the
company even better. And with that, those objectives will lead into good,
effective and efficient outcomes.

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