Corporate governance and the control
environment:
Governance:
What is corporate governance?
Def: Corporate governance is the system by which companies are
directed and controlled to ensure transparency, accountability,
responsibility, and fairness to all stakeholders of the company.
How directors protect and manage(govern) the interests of
stakeholders.
o Why directors?
They manage the company but are mostly not
shareholders(owners)
Hence, guidelines are required to set our roles and
responsibilities
KING report= directors should take responsibility for the
corporate governance of the company.
Integrated reporting= Explain how an organisation creates value
over time.
Six capitals of integrated reporting, as part of the King IV report.
o Financial
o Intellectual
o Human
o Social and related
o Manufactured
o Natural
Risks:
What is risk?
Uncertain events, including the likelihood of such events occurring
and their effect, that could influence, both in a positive and a
negative manner, the achievement of the company’s objectives
o Risk is inevitable, as it is inherent to any company
o Business risk: any event/s that threatens the achievement of
an organisation’s objectives
o Risks need to be effectively managed
o But by who?
Those charged with governance (can delegate)
They need to implement proper controls to address
these risks
environment:
Governance:
What is corporate governance?
Def: Corporate governance is the system by which companies are
directed and controlled to ensure transparency, accountability,
responsibility, and fairness to all stakeholders of the company.
How directors protect and manage(govern) the interests of
stakeholders.
o Why directors?
They manage the company but are mostly not
shareholders(owners)
Hence, guidelines are required to set our roles and
responsibilities
KING report= directors should take responsibility for the
corporate governance of the company.
Integrated reporting= Explain how an organisation creates value
over time.
Six capitals of integrated reporting, as part of the King IV report.
o Financial
o Intellectual
o Human
o Social and related
o Manufactured
o Natural
Risks:
What is risk?
Uncertain events, including the likelihood of such events occurring
and their effect, that could influence, both in a positive and a
negative manner, the achievement of the company’s objectives
o Risk is inevitable, as it is inherent to any company
o Business risk: any event/s that threatens the achievement of
an organisation’s objectives
o Risks need to be effectively managed
o But by who?
Those charged with governance (can delegate)
They need to implement proper controls to address
these risks
