Increase your success by managing your company according to the principles of corporate governance.
Corporate governance is the entirety of all international and national laws, regulations, values and principles that apply to a business. You can thereby deduce how to lead and manage the company to reach its objectives in an efficient and effective way. In the long term, corporate governance serves to improve the management quality and increase business success.
Visualize the operational framework for leading and controlling your business with a corporate governance presentation:
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Indicators for good corporate governance include a fair dealing with risk, creation of transparency, functional management, and a focus on company decisions for the long-run. It’s also important to preserve the interests of the stakeholders and the purposeful collaboration of corporate management and controlling. Corporate governance involves mandatory and voluntary activity which can be very complex.
3. Corporate Governance is about promoting
corporate fairness, transparency and
accountability.
J. Wolfensohn (President of the World Bank Group)
4. PRINCIPLES
3 Key Factors of Corporate Governance
Transparency, public
knowledge and management
build both internal and
external trust in the
company and provide
competitive advantages
Trust can reduce transaction
costs, and certain security
measures can be eliminated.
Overall, corporate
governance leads to an
improvement of
management quality and
company performance as
well as encourages dialogue
between the major
stakeholders.
MANAGE TRANSPARENCY STRENGTHEN TRUST INCREASE VALUE
6. PRINCIPLES
4 Key Areas of Corporate Governance
The general
objective of the
company
01
Corporate
communication
02
Structures, processes,
people in management
03
Evaluation of
corporate acts
04
7. PRINCIPLES
Basic Steps
ESTABLISH
an effective corporate
governance structure
STRENGTHEN
corporate
management
RESPECT
the rights and
interests of the
shareholders
IMPROVE
information and
transparency
CONTROL
and monitor
departments and
work processes of
the company
WARRANTY
the shareholders’
rights
STEP 6STEP 5STEP 4STEP 3STEP 2STEP1
8. PRINCIPLES
Dimensions of a Complex Structure of Corporate Governance
CorporateGovernance
Legal
Governance
Economic
Governance
Social-
Political
Governance
10. PRINCIPLES
Task Framework of Corporate Governance
Anti-corruption process
Arbitration procedure
Strategy and management
Structures and
relationships
Environmental
management system
Business continuity plan
Compliance and
Accountability
Performance monitoring
REPRE-
SENTATIVE
Principals
Risk management
MonitoringAgents
Performance
in accordance with
11. ANSÄTZE
The Shareholder Approach aims to satisfy the
wishes and ideas of the shareholders.
Pursuing the economic goals of the
shareholders is management’s top
concern.
On the other hand, the Stakeholder
Approach strives to meet the needs of all
stakeholders, which includes not only the
shareholders but all who are affected by
company acts, directly and indirectly.
12. ANSÄTZE
Going with the Stakeholders
INTERNalSTAKEHOLDER EXTERNal STAKEHOLDER
Owner
Employee
Management
Customers
Suppliers
Society
Shareholders
Partner
COMPANY
13. SUCCESS FACTORS
Objectives
To guarantee
shareholder value and
consider the interests of
all other stakeholders
To find balance between
shareholder interests
and those of all other
stakeholders
To develop the investors’
trust and secure higher
growth commitment
14. SUCCESS FACTORS
Corporate Governance Success Factors
Forecasting and
responsible
decision-making
Flexible CG
structure based
on corporate
interests
Clear regulationsIdentifying and
reviewing critical
issues and
strategies
Clear, reliable and current
databank systems
Success
Factors
15. MECHANISMS AND CONTROLS
Internal Mechanisms and Controls
Monitoring by the board Balance of hierarchy and
power
Monitoring by
stakeholders and
shareholders
Performance-based
remuneration
Internal auditors
and corporate
procedures
16. MECHANISMS AND CONTROLS
External Mechanisms and Controls
CONTROLLS
REGULATIONS
Bureaucracy, market
disclosure, laws
MARKETS
Capital, competition, product,
customer and raw material
markets
ENVIRONMENT
Media pressure, revolution in
information technology (social
networks, etc.)
17. MODELS
Tier Systems
One-tier SYSTEM
is found mostly in English-speaking countries, where there is
only one management level. The control committee is appointed
by the board members.
Two-tier system
is more common in many European countries. Management is
divided into two systems: the board of directors and the
supervisory board.
1
2
19. MODELS
Example of the Audit Office of New South Wales
Key Stakeholder Rights
Risk Management
Ethics
Disclosure
Remuneration Management
Key stakeholder management
program
Structure
Remuneration is fair and
responsible
Internal and external audit, audit
and risk committee
Fraud and corruption control
framework, ethical framework
Continuous disclosure, annual
report
Corporate Reporting
CEO and management sign-off on
internal controls, risk
management program
Diversity policy, clear accountabilityand
delegations,regular reporting,leadership and
strategicand businessplans
20. CHECKLISTS
Tips on How to Execute CG
What are your control plans? Are the internal structures
constantly being supervised?
Are all corporate bodies being treated equally?
How transparent are the acts within your company to
employees and stakeholders?
Are all legal regulations being followed?
Are you able to analyze and avoid misconduct in
corporate bodies?
Placeholder text
Are the interests of shareholders and stakeholders being
considered?
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