CGV115D Workbook final 2025

Corporate Governance I

Introduction

• Purpose of Module: To equip students with:

  • History, purpose, and objectives of corporate governance.

  • Insight into principles as presented in the King Report.

  • Identification of governance prescripts in South African legislation.

  • Basic risk mitigation recommendations in a business context.

  • Competence for ethical decision-making with reference to the professional code of ethics.

Learning Package

• Required Materials:

  • King IV Report on Corporate Governance in South Africa.

  • Professional Code of Ethics and Conduct of the Institute of Internal Auditors.

  • Class notes from the lecturer.

  • Internal Auditor magazine.

Assumed Knowledge and Skills

• Proficiency in English is assumed; advisable to use a bilingual dictionary if not a first language.

Outcomes

• Recognize and understand corporate governance and corporate social responsibility.

• Apply the tenets of King IV.

• Identify professional ethics in case studies.

Teaching and Learning Approach

• A blended approach combining formal lectures and interactive tutorials is employed.

• Active participation in self-assessment activities is encouraged.

Assessment Strategy

• Components of Assessment:

  • Two written tests (40% each).

  • Two computer-based tests (10% each).

  • 40% overall is required for exam qualification.

• Final Mark Calculation: Average of predicate mark and examination mark.

UNIT 1: Global View of Corporate Governance

Learning Outcomes of Unit

• Understand history, purpose, and objectives of corporate governance and CSR.

Assessment Criteria

• Differentiate between governance and government.

• Define corporate governance.

• Discuss historical references (Treadway and Cadbury).

• Describe cornerstones of corporate governance.

UNIT 1.1: Government and Governance

• Definition: Governance refers to the manner of governing an organization (not confined to public sector).

• Examples of Governance Types:

  • Global governance, national/federal governance, corporate governance, etc.

UNIT 1.2: Corporate Governance

• Origin trace back to the emergence of corporations during the 16th and 17th centuries.

• Definitions: Narrow vs Broad perspectives on corporate governance.

• Key Issues: Historical financial crises often resulted from corporate governance failures.

UNIT 1.3: Development of Corporate Governance

• Various codes established over years: Cadbury, Basel, King codes, Sarbanes-Oxley Act, etc.

UNIT 1.4: Cornerstones of Corporate Governance

• Responsibilities: Governing body to direct and oversee compliance, including committees.

• Committees Established: Audit, nominations, risk governance, remuneration, social, and ethics committees.

UNIT 1.5: Economic Systems

• Factors of Production: Land, labor, capital, and entrepreneurship.

• The economic system influences the management of these resources and impacts governance.

UNIT 1.6: Corporate Social Responsibility (CSR)

• Definition and Importance: CSR reflects the involvement of corporates in social upliftment projects and ethical business practices.

• Triple Bottom Line: Acknowledges the importance of economic, social, and environmental impacts.

UNIT 2: Corporate Governance in South Africa

Learning Outcomes

• Apply tenets of King IV and understand aspects of governance.

Unit Focus

• The King Report is pivotal for corporate governance in South Africa and addresses both traditional and contemporary governance concerns related to social transformation.

UNIT 3: The Role of Ethics in Corporate Governance

Learning Outcomes

• Apply principles of professional ethics in case studies.

Themes Addressed

• Morals vs Ethics: Distinction between learned principles and the mindful application of these principles.

• Organisational Ethics: How the collective ethical behavior in an organization is reflected in decision making.

• Professional Ethics: Specific codes governing accounting, auditing, engineering professions, etc.

UNIT 4: Risk Management

Learning Outcomes

• Define and discuss ERM concepts.

Key Concepts

• Risk Management Process: Continuous identification, assessment, response, and monitoring of risks.

• Enterprise Risk Management (ERM): Strategic framework for managing risks affecting operations and objectives.

Risk Types

• Business Risk, Financial Risk: Distinguishing factors and examples of each type in operational contexts.

COSO Framework for Enterprise Risk Management

Summary

• Importance of establishing a comprehensive risk management framework to enhance corporate governance.

• Framework Structure: Components, principles, and their application in managing risks effectively in organizations.