Corporate governance
What is Corporate governance?
A set of rules and processes that are used by Top Management to direct and control the business
which provides a framework and control measures to manage the bottom line and stakeholder
interests.
Primary characteristics of Corporate Governance
▪ Transparency: Act in accordance with a set of rules.
▪ Independence: No conflict of interest. Unbiased.
▪ Accountability: Take responsibility for your actions.
▪ Fairness: Treat and be treated equally.
▪ Integrity: Doing business in a truthful and honest manner.
▪ Discipline: Act with sound judgement.
King Code
▪ Transparency: Act in accordance with a set of rules.
▪ Independence: No conflict of interest. Unbiased.
▪ Accountability: Take responsibility for your actions.
▪ Fairness: Treat and be treated equally.
▪ Discipline: Act with sound judgement.
▪ Social responsibility: The business must act responsibly when it comes to social issues such
as fair remuneration, child labour, pollution, etc.
▪ Director’s responsibility:
✓ Fiduciary duty: Act in the best interest of the business.
✓ Good faith: Act will skill and diligence.
✓ Discloser personal/ financial interest: Declare all persona information that may
influence their decisions.
Integrated reporting
▪ Also known as triple bottom line reporting
▪ Only focus on financial performance.
▪ Three elements:
o Impact of society: Support and develop society
o Impact on environment: Protect the environment and sustainability of resources
o Impact on financial gain: Improve return on investment and financial improvements
to stakeholders
Business Studies Corporate Governance 1
What is Corporate governance?
A set of rules and processes that are used by Top Management to direct and control the business
which provides a framework and control measures to manage the bottom line and stakeholder
interests.
Primary characteristics of Corporate Governance
▪ Transparency: Act in accordance with a set of rules.
▪ Independence: No conflict of interest. Unbiased.
▪ Accountability: Take responsibility for your actions.
▪ Fairness: Treat and be treated equally.
▪ Integrity: Doing business in a truthful and honest manner.
▪ Discipline: Act with sound judgement.
King Code
▪ Transparency: Act in accordance with a set of rules.
▪ Independence: No conflict of interest. Unbiased.
▪ Accountability: Take responsibility for your actions.
▪ Fairness: Treat and be treated equally.
▪ Discipline: Act with sound judgement.
▪ Social responsibility: The business must act responsibly when it comes to social issues such
as fair remuneration, child labour, pollution, etc.
▪ Director’s responsibility:
✓ Fiduciary duty: Act in the best interest of the business.
✓ Good faith: Act will skill and diligence.
✓ Discloser personal/ financial interest: Declare all persona information that may
influence their decisions.
Integrated reporting
▪ Also known as triple bottom line reporting
▪ Only focus on financial performance.
▪ Three elements:
o Impact of society: Support and develop society
o Impact on environment: Protect the environment and sustainability of resources
o Impact on financial gain: Improve return on investment and financial improvements
to stakeholders
Business Studies Corporate Governance 1
