Governance and Corporate Responsibility

Flashcards focused on key terms and concepts related to governance and corporate responsibility based on the lecture notes.

Board of Directors

A group of individuals elected to represent shareholders and oversee the management of a company.

Shareholders

Individuals or entities that own shares of stock in a company and thus have a financial interest in its success.

Corporate Governance

A system by which companies are directed and controlled, ensuring accountability and alignment with the interests of shareholders.

Statutory Duties

Legal responsibilities laid down by law, which directors must adhere to when running a company.

Independent Judgment

The ability of directors to make decisions based solely on their own assessment, free from conflicts of interest.

Conflicts of Interest

Situations where a director's personal interests may compromise their ability to act in the best interest of the company and its shareholders.

Financial Statements

Formal records of the financial activities and position of a business, prepared by directors to provide an overview for shareholders.

Internal Controls

Processes and procedures implemented to ensure the integrity of financial and accounting information, preventing fraud and errors.

Going Concern

An accounting principle that assumes a company will continue its operations into the foreseeable future.

Segregation of Duties

An internal control mechanism that divides responsibilities among different individuals to reduce the risk of errors or fraud.

Long Termism

An approach where directors focus on sustainable growth and the long-term interests of shareholders rather than short-term gains.

Local Reporting Standards

Specific accounting guidelines that companies must follow based on their geographical location.

Environmental Impact

The effect that a company’s operations have on the local community and environment that directors must consider.

Balanced Assessment

A fair and comprehensive evaluation of a company's position, including risks and opportunities, presented by directors.