Business Ethics- Chapter 5 Corporate
Governance
Corporate governance - answer the system (or process) by which organizations are
directed and controlled
What is corporate governance concerned with? - answer how well organizations meet
their obligations to stakeholders
Board of Directors - answer A group of individuals who oversee governance of an
organization. They are elected by vote of the shareholders at the annual general
meeting
What is the board made up of? - answer Inside and outside members
Inside members - answer Hold management positions in a company
Outside members - answer Do not hold management positions within a company
Audit committee - answerstaffed by members of the board of directors plus independent
or outside directors. Responsible for monitoring the financial policies and procedures of
an organization
Compensation committee - answerstaffed by members of the board of directors plus
independent or outside directors. Responsible for setting the compensation for the CEO
and other senior executives
Governance of the Modern Corporation - answerOwners--- Audit committee,
compensation committee, board of directors, corporate governance committee--- CEO,
CFO, COO--- Managers and employees, creditors--- Stakeholders
Corporate governance committee - answerstaffed by members of the board of directors
and specialists. Responsible for monitoring the ethical performance of the corporation
and overseeing compliance with the company's internal code of ethics as well as federal
and state regulations on corporate conduct
Adrian Cadbury - answerin 1992 led a committee in Great Britain to address financial
aspects of corporate governance in response to public concerns over director's
compensation at high profile companies in Great Britain. Argued for a guideline of
comply or explain
Governance
Corporate governance - answer the system (or process) by which organizations are
directed and controlled
What is corporate governance concerned with? - answer how well organizations meet
their obligations to stakeholders
Board of Directors - answer A group of individuals who oversee governance of an
organization. They are elected by vote of the shareholders at the annual general
meeting
What is the board made up of? - answer Inside and outside members
Inside members - answer Hold management positions in a company
Outside members - answer Do not hold management positions within a company
Audit committee - answerstaffed by members of the board of directors plus independent
or outside directors. Responsible for monitoring the financial policies and procedures of
an organization
Compensation committee - answerstaffed by members of the board of directors plus
independent or outside directors. Responsible for setting the compensation for the CEO
and other senior executives
Governance of the Modern Corporation - answerOwners--- Audit committee,
compensation committee, board of directors, corporate governance committee--- CEO,
CFO, COO--- Managers and employees, creditors--- Stakeholders
Corporate governance committee - answerstaffed by members of the board of directors
and specialists. Responsible for monitoring the ethical performance of the corporation
and overseeing compliance with the company's internal code of ethics as well as federal
and state regulations on corporate conduct
Adrian Cadbury - answerin 1992 led a committee in Great Britain to address financial
aspects of corporate governance in response to public concerns over director's
compensation at high profile companies in Great Britain. Argued for a guideline of
comply or explain
