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Flashcards in Chapter 13 - Other Governance Issues Deck (14)
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1

What are the concepts on which King IV is based?

- ethical leadership
- corporate citizenship
- sustainable development
- stakeholder inclusivity
- integrated thinking
- integrated reporting

2

In what way is the King IV Code unusual?

It adopts a "stakeholder inclusive approach" to governance, whereas other codes (including the UK Code) usually take a shareholder or enlightened shareholder approach.

3

What is the US' main law on corporate governance?

The Sarbanes Oxley Act 2002

4

What are the main requirements of s 404 of the SOX in the US?

Companies must include an internal control report in their annual report.

5

What are the 4 key consequences of the SOX regime?

- created a central oversight board for audit services
- sets standards for independence of external auditors
- senior executives must take responsibility for financial reporting
- new rules relating to internal control

6

What are the key criticisms of s 404 SOX?

Takes up too much time, and gives too much liability to CEOs/CFOs, thereby deterring foreign companies from listing shares in the US.

7

Why should institutional investors want companies to comply with codes of governance?

In order to protect and develop sustainable corporate value.

8

To which group do the Nolan Principles Apply?

The public sector

9

What are the Nolan Principles for Public Life?

1 Selflessness
2 Integrity
3 Objectivity
4 Accountability
5 Openness
6 Honesty
7 Leadership

10

How do governments differ from companies in their governance requirements?

1 Government departments and stock market companies have different requirements
2 Ownership structures are different

11

What is the code of best practice for central government called?

Corporate governance in central government departments: code of good practice 2011.

12

What are the principle of the Charity Governance Code?

1 Organisational purpose
2 Leadership
3 Integrity
4 Decision making , risk and control
5 Board effectiveness
6 Diversity
7 Openness and accountability

13

Why might governance be a particular problem for charities?

Part-time boards of trustees may find it difficult to perform effectively.

14

What governance guidance is available to unlisted companies?

The IOD Guidance for Unlitsed Companies.