Financial Analysis. Lesson 13. Corporate Governance and Ethical Standards
Financial Analysis. Lesson 13. Corporate Governance and Ethical Standards
Corporate governance ensures accountability and transparency within a company's management.
Board of directors oversees company operations and safeguards shareholder interests.
Fiduciary duty is the legal responsibility to act in shareholders’ interests.
Shareholder rights grant investors certain powers, like voting on major issues.
Stakeholder theory considers the interests of all parties affected by business.
Agency problem arises when management’s interests conflict with shareholder goals.
Executive compensation links management’s financial rewards to company performance.
Audit committee monitors financial reporting accuracy and internal control effectiveness.
Independent directors are board members unaffiliated with the company’s management.
Corporate social responsibility (CSR) promotes ethical practices impacting society and environment.
Whistleblower policy protects individuals reporting misconduct or ethical breaches.
Transparency is the clear and open communication of company operations.
Conflict of interest occurs when personal gain affects business decisions.
Ethics code outlines principles guiding the company’s professional conduct.
Insider trading involves trading based on non-public, material information.
Proxy voting allows shareholders to vote without attending meetings in person.
Risk management identifies, assesses, and mitigates risks facing a business.
Disclosure requirements mandate providing essential information to stakeholders.
Ethical dilemma involves complex choices between competing moral principles.
Environmental, social, governance (ESG) factors guide sustainable investment decisions.
Technical Examples:
Audit committee oversight helps ensure accuracy in financial reporting.
Whistleblower policy encourages reporting of unethical practices within organizations.
Conflict of interest rules reduce personal gains influencing business decisions.