Corporate Governance

What is it?

• System by which companies are directed and controlled

Corporate Governance is the Responsibility of the Board of Directors:

• It is the Board of directors of each company that is legally responsible for the governance of the company

• The shareholders’ role in corporate governance is to appoint the directors (and the auditors where required) and to satisfy themselves that an appropriate governance structure is in place

Key Responsibilities of the Board of Directors:

• Setting the company’s objectives and aims

• Determining the strategy to achieve those aims and objectives

• Providing the leadership to put them into effect

• Supervising the management of the business

• Reporting to shareholders on their stewardship of the business

Essential Elements of ‘Best Practice’ Corporate Governance:

• The role of CEO and Chairman in public companies should be separated

• Boards should have at least three non-executive directors, two of whom should have no financial or personal ties to executives

• Each board should have an audit committee composed of non-executive directors