1. “Small business enterprises do not need good governance.” Do you agree? Explain.
No, small business enterprises need good governance. It is for the reason of better business, the
business even though small needs to be carried and governed well. Workers must be monitored
and motivated, budgets should be well planned and such more profit efficient and effective
execution of the plan, quality products and a stepping stone to reach the business goals. The
business will bloom and will function well if governed properly and while the business grows good
governance is being practice it will be carried when the business grows big.
2. Does good governance require absolute rules that must be adopted by all
organizations?
Good governance does not really require absolute rules, rules are made and
should be followed by the company no matter what. It all depends on the
employees. They should follow the rules set by the company the best they can.
good governance doesn't come on what the rules states, but on how those
people being governed the rules act.
3. What is the essence of any system of corporate governance?
The essence of any system o f good corporate governance is to allow the board
and management the freedom to drive their organization forward and to
exercise that freedom within a framework of effective accountability. Good
governance gives the leaders of the company to lead the company. But good
governance is good governance because of the word good.
4. Where does the board of directors derive its authority?
The board of directors are the persons elected by the shareholders of the
company. The shareholders owns the business and giving the fact that they are
large and commonly scattered they vote for persons with the needed skills and
knowledge to be the part of the board of directors which makes the decisions
for the company their place
5. To whom is the board of directors accountable?
The Board of Directors is accountable to shareholders for the company's business
operations and corporate governance in accordance with management objectives
and maximization of shareholders' benefit within the framework of sound business
ethics whilst taking into account the benefits of all stakeholder groups.
6. On what aspects do shareholders demand accountability from the board of
directors?
The shareholders demand accountability to the boars of directors in all
decisions they make from planning to the issuance of dividends. The
shareholders gives the capitalization of the business and the board serves as
the decision maker of the business all of the decisions the boars makes they
are accountable to the shareholders
7. What is management’s responsibility as far as financial reporting is concerned?
Management is responsible for the integrity and objectivity of the financial
statements. Management recognizes its responsibility for conducting the
company's affairs in compliance with established financial standards and
applicable laws, and maintains proper standards of conduct for its activities. They
should produce the needed financial statements on the required dates of release
and with the compliance of the external users., The presentation of accounts and
disclosures should be understandable, and correct.
8. Describe the broad role of the shareholders in a corporation.
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Shareholders make a financial investment in the corporation,
which entitles those with voting shares to elect the
directors. Shareholders do not normally have any rights to be
involved directly in company management example, they are
the ones who votes for the board of directors, Their connection
to company management is typically via the Board of Directors
as described above.
9. Describe the broad role of the Board of Directors.
The board of directors are like the brain of the company, they are top of the
organizational structure. Bid decisions heavily rely on the, decisions like
issuance of new stock or buying new building, expansion of the business and
such. They also creates the plan for the business short and long term plans.
10. What are the specific activities of the board of directors?
1. Overall operations
• Establishing the organization’s vision, mission,
values and ethical standards
• Delegating an appropriate level of authority to
management
• Demonstrating leadership
• Assuming responsibility for the business
relationship with CEO including his or her
appointment, succession, performance
remuneration and dismissal.
• Overseeing aspects of the employment of the
management team including management
remuneration, performance and succession
planning
• Recommending auditors and new directors to
shareholders
• Ensuring effective communication with
shareholders and other stakeholders
• Crisis management
• Appointment of the CFO and corporate secretary.
2. Performance
• Ensuring the organization’s long-term viability and
enhancing the financial position
• Formulating and overseeing implementation of corporate
strategy
• Approving the plan, budget and corporate policies
• Agreeing key performance indicators (KPIs)
• Monitoring/assessing assessment, performance of the
organization, the board itself, management and major
projects
• Overseeing the risk management framework and
monitoring business risks
• Monitoring developments in the industry and the
operating environment
• Oversight of the organization, including its control and
accountability systems
• Approving and monitoring the progress of major capital
expenditure, capital management and acquisitions and
divestitures
3. Compliance/Legal Conformance
• Understanding and protecting the organization’s financial
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position
• Requiring and monitoring legal and regulatory compliance
including compliance with accounting standards, unfair
trading legislations, occupational health and safety and
environmental standards
• Approving annual financial reports, annual reports and
other public documents/ sensitive reports
• Ensuring an effective system of internal controls exists and
is operating as expected
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