Term
internal
external
policy interventions thru regulations |
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Definition
| mechanisms that shape corporate governance structure |
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Term
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Definition
| designed to manage, direct, and monitor corporate activities in order to create sustainable stakeholder value |
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Term
bod
audit committee
mgmt
internal controls |
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Definition
| examples of internal governance mechanisms |
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Term
capital market
market for corporate control
labor market
state/federal statutes
court decisions |
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Definition
| examples of external governance mechanisms |
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Term
| external governance mechanisms |
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Definition
| intended to monitor the company's activities, affairs, and performance to ensure that the interests of insiders are aligned with he interests of outsiders |
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Term
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Definition
| both internal and external corporate governance mechanisms are intended to induce managerial actions that maximize profit and shareholder value |
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Term
corporate laws
securities laws
listing standards
best practices |
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Definition
| primary sources of corporate governance |
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Term
securities act of 1933
securities exchange act of 1934 |
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Definition
| two fundamental laws pertaining to public companies |
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Term
| corporate governance best practices |
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Definition
| nonbinding guidelines intended to improve corporate governance policies and practices of public companies beyond and above state/federal statutes and listing standards |
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Term
| corporate governance reforms |
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Definition
| state/federal statutes, listing standards, best practices, collectively |
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Term
| SOX does NOT represent a comprehensive and systematic approach to corporate governance, but rather it addresses potential conflicts of interest that may exist; encourages a rules based approach |
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Definition
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Term
| corporate governance reporting CGR |
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Definition
| entails assessing the quality and effectiveness of the organization's corporate governance and reporting findings to interested stakeholders |
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Term
| US board election process is plurality voting |
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Definition
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Term
shareholder aspect
stakeholder aspect
integrated aspect |
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Definition
| three aspects of corporate governance |
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Term
value adding philosophy
ethical conduct
accountability
shareholder democracy and fairness
integrity of financial reporting
transparency
independence |
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Definition
| principles for basing corporate governance structure |
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Term
managerial
oversight
monitoring
compliance
internal audit
legal/fiancial advisory
external audit |
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Definition
| seven corporate governance functions |
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Term
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Definition
| moral principles about right and wrong, honorable behavior reflecting values, or standards of conduct |
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Term
| honesty, openness, responsiveness, accountability, due diligence, fairness |
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Definition
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Term
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Definition
| advocates that ethical behavior or the moral rightness of one's actions are determined by the results of the act and its impact on either the individual (egoism) or all involved (utilitarianism) |
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Term
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Definition
| assess the nature of the act as being either ethical or unethical regardless of its results |
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Term
| individualist dimension of ethical decision making |
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Definition
| asserts that individuals are only concerned with the impact of their decisions on their own and their immediate family's well being and interests |
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Term
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Definition
| postulates that individuals tend to belong to groups and thus focus on the group's interests when making ethical decisions |
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Term
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Definition
| focuses on ethical theories, their evolution, and the social, religious, spritiaul, and cultural influences shaping those theories |
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Term
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Definition
| emphasize practical aspects by providing principles of appropriate behavior and guidance for what is right or wrong, good or bad in behavior |
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Term
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Definition
| deal with the application of moral principles and reasoning as well as codes of conduct for a particular profession or segment of the society |
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Term
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Definition
| subset of applied ethics that deals with ethical issues, conflicts of interest, and the morality of business decisions |
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Term
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Definition
| the moral principles and ethical standards that guide business behavior |
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Term
| organization w/in "organizational ethical culture" |
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Definition
| a group of individuals or entities bound to achieve a shared goal |
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Term
| ethics w/in "organizational ethical culture" |
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Definition
| honorable behavior conforming to the norm of the group |
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Term
| culture w/in "organizational ethical culture" |
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Definition
| a pattern of shared beliefs adopted by the group in dealing with its internal and external affairs |
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Term
| "organizational ethical culture" |
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Definition
| an environment of beliefs, ethical behavior, and practices shared by members in pursuing their goals and fulfilling their responsibilities |
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Term
society level
industry level
company level
individual manager level |
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Definition
| four levels of business ethics based on what type of business and how actions are evaluated |
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Term
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Definition
| defines ethical behavior and assess the effect of business on society |
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Term
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Definition
| suggests that different industries have their own set of ethical standards |
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Term
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Definition
| suggests that different companies have their own set of ethical standards |
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Term
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Definition
| each manager and other corporate participants are responsible for their own ethical behavior |
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Term
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Definition
| perhaps the most essential determinant of business ethics |
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Term
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Definition
| a moral pattern allowing circumstances to overrule principle and allegiance |
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Term
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Definition
| definable moral, criminal, or civil law |
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Term
ethics sensitivity
ethics incentives
ethical behavior |
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Definition
| triangle of business ethics |
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Term
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Definition
| moral principles, workplace factors, gamesmanship, loyalty, peer pressure, and job security that influence one's ethical decisions and are derived from the organization's ethical culture |
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Term
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Definition
| encompass rewards, punishments, and requirements for behaving either ethically or unethically |
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Term
| examples of ethics incentives |
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Definition
what part of ethics triangle?
tone @ the top
codes of conduct
ethics rules |
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Term
individual based incentives
organization based incentives
market based incentives
profession based incentives
regulatory based incentives |
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Definition
| Sources of incentives for ethical behavior |
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Term
| individual based incentives |
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Definition
| pertain to one's ethical values and moral principles to do the right thing |
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Term
| the need and desire of individuals to maximize their own good and minimize their discomfort |
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Definition
| the fundamental individual based incentive |
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Term
| organization based incentives |
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Definition
| come from setting an appropriate tone at the top and establishing, maintaining, and enforcing ethical behavior thruout the orgnaiztion |
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Term
| organization based incentives |
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Definition
| include measures for motivating and mandating individuals to comply withe the company's applicable regulations and ethical standards and act within ethical and legal constraints |
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Term
| profession based incentives |
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Definition
| defined by a professional affiliation of individuals |
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Term
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Definition
| provided by markets in imposing substantial costs on organizations and individuals that engage in unethical behavior |
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Term
| market based incentives: reducing costs by lowering the quality of products and services |
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Definition
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Term
| regulatory based incentives |
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Definition
| induced thru rules and regulations by imposing sanctions, fines, and penalties on organizations and individuals who engage in unethical and unacceptable behavior |
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Term
| individual based incentives |
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Definition
| relate to personal integrity and are the primary driver of ethical behavior |
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Term
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Definition
| requires companies to disclose whether they have adopted code of ethics or not |
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Term
| the acceptance of ethical duties or responsibilities |
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Definition
| the cornerstone of a profession |
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Term
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Definition
| the behavior of individuals and the organization's commitment to conduct their activities in an honorable manner |
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Term
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Definition
| required to conduct internal audits, assess their compliance, and provide officer certifications regarding the completeness, accuracy, and timeliness of their responsibilities to the questionnaire; may engage an independent public accountant to examine or review their responses to the questionnaire and express a conclusion |
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Term
moral values
motives
communication
qualities
achievements |
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Definition
| five key aspects of integrity |
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Term
leadership
strategy
policies
information
culture |
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Definition
| five organizational drivers |
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Term
honesty
fairness
compliance
public interest
transparency
remediation
consistency |
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Definition
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Term
| an appropriate code of ethics that sets the right tone at the top |
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Definition
| backbone of effective corporate governance |
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Term
| the enforcement of shareholders' rights |
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Definition
| focus of the legal definition of corporate governance |
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Term
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Definition
| the process affected by a set of legislative, regulatory, legal, market mechanisms, listing standards, best practices, and efforts of all corporate governance participants, including the company's directors, officers, auditors, legal counsel, and financial advisers, which creates a system of checks and balances with the goal of creating and enhancing enduring and sustainable shareholder value, while protecting the interest of other shareholders |
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Term
| corporate governance has evolved from its role of reducing agency costs to creating long term shareholder value and recently to increasing value for all stakeholders |
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Definition
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Term
| shareholder aspect of corporate governance |
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Definition
| focuses on the shareholder value creation and enhancement goal of corporate governance |
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Term
| stakeholder aspect of corporate governance |
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Definition
| emphasizes the value protection goal for all stakeholders |
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Term
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Definition
| Which aspect of corporate governance does the US typically focus on? |
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Term
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Definition
| Which aspect of corporate governance does Europe typically focus on? |
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Term
| shareholder aspect of corporate governance |
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Definition
| based on the premise that shareholders provide capital to the corporation that exists for their benefit |
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Term
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Definition
| idea that fiduciary duties of corporate directs and executives are to shareholders who have a residual claim on the company's residual assets and cash flows |
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Term
1. the separation of ownership and control
2. ** incomplete contracts or costly enforceable contracts between the agents and the principals (agency costs) |
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Definition
| the principle agent problem arises from 2 factors: |
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Term
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Definition
| incomplete contracts or costly enforceable contracts between the agents and the principals |
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Term
1. failure of managerial competence resulting from unintentional mistakes or negligence in discharging fiduciary duties
2. failutres of managerial integrity caused by willful or opportunistic behaviors that have detrimental effects on the value of the firm's assets |
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Definition
| two types of managerial failures that may prevent mgmt from acting int he best interest of SH |
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Term
board of directors
internal controls |
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Definition
| internal corporate governance mechanisms |
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Term
external audit
monitoring
regulatory functions |
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Definition
| external corporate governance mechanisms |
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Term
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Definition
| individuals or groups who affect the company's strategic decisions, operations and performance, and are also affected by its decisions or activities |
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Term
mechanisms
principles
functions |
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Definition
| three interrelated components that are the basis of corporate governance structure |
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Term
fairness
transparency
accountability
responsibility |
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Definition
| OECD's revised Principles of Corporate Governance(organization for economic cooperation and development) |
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Term
honesty
resilience
responsiveness
transparency |
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Definition
| corporate governance principles |
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Term
| the open and responsive corporate governance structure is more susceptible to exploitation |
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Definition
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Term
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Definition
| the cornerstone of corporate governance in continuously monitoring best practices |
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Term
managerial
oversight
montiroing
compliance
internal audit
legal/advisory
external audit |
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Definition
| corporate governance functions |
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Term
oversight (bod)
managerial (mgmt)
monitory (SH) |
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Definition
| (3) most crucial functions of corporate governance for the achievement of sustainable corporate performance |
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Term
| evolved to integrated aspects of meeting both compliance requirements and promoting a strategic business imperative |
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Definition
| corporate governance post SOX |
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Term
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Definition
| shareholders provide capital to the corporations that exists for their benefit |
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Term
| corporate governance principle of honesty |
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Definition
| corporate communications with both internal and external audiences, including public financial reports, should be accurate, fair, transparent, and trustworthy |
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Term
| corporate governance principle of resilience |
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Definition
| a resilient corporate governance structure is sustainable and enduring in the sense that it will easily recuperate from setbacks and abuses |
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Term
| corporate governance principle of responsiveness |
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Definition
| effective corporate governance responsive to the interests and desires of all stakeholders, as well as responsive to emerging initiatives, and changes in political, regulatory, social, and environmental issues |
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Term
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Definition
| focuses on shareholder value creation and enhancement through the development of long term strategies to ensure sustainable and enduring operational performance |
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Term
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Definition
| i. Concentrates on the accountability of the way the company is managed and monitored to protect the interests of shareholders and other stakeholders |
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Term
| improved quality of information, enhanced communications with analysts and investors, and integration of the organization’s operating, financial, and social performance |
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Definition
| Perceived benefits of reporting both financial and nonfinancial key performance indicators (KPIs): |
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Term
| Protecting investors from obtaining misleading financial information disseminated to the capital market by public companies in their public filings |
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Definition
| responsibilities of corporate governance gatekeepers |
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Term
board of directors
external auditor
Legal counsel
Financial advisors and investment bankers |
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Definition
| corporate governance gatekeepers |
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Term
|
Definition
| first tier of stakeholder hierarchy |
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Term
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Definition
| primary mission of public companies: |
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Term
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Definition
| those who influence or are influenced, either directly or indirectly, by organizational activities |
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Term
o management certification
o management certification of the effectiveness of ICFR
o monitoring of published financial statements by users of financial reports (users)
o SEC reviews of published financial statements and PCAOB inspections of audit quality
o independent audit reports
o corporate governance oversight (audit committee) |
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Definition
| six layers of financial statement scrutiny |
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Term
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Definition
| A pattern of shared beliefs adopted by the group in dealing with its internal and external affairs. |
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Term
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Definition
| Moral principles, workplace environment, gamesmanship, loyalty, peer pressure, and job security influencing ethical decisions and actions and derived from the organization’s ethical culture |
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Term
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Definition
| Rewards, punishments, and requirements for ethical behavior (e.g., tone at the top, AICPA Code of Professional Conduct, etc.). Incentives may be based on individual, organization, market, profession, and regulation. |
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Term
|
Definition
| Rewards, punishments, and requirements for ethical behavior (e.g., tone at the top, AICPA Code of Professional Conduct, etc.). Incentives may be based on individual, organization, market, profession, and regulation. |
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Term
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Definition
| Doing “the right thing” requires rising above the rules-based mindset asking, “Is this legal?” to adopt the more principles-based approach asking, “Is this right?” |
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Term
integrity,
objectivity,
professional competence and due care,
confidentiality,
professional behavior. |
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Definition
| The key principles of the IESBA’s code of ethics are: |
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Term
| - Value-adding philosophy - Ethical conduct - Accountability - Shareholder democracy and fairness - Integrity of financial reporting - Transparency - Independence What are the other principles upon which corporate governance structure should be developed? |
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Definition
| What are the other principles upon which corporate governance structure should be developed? |
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Term
| Corporate Governance Reporting (CGR) |
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Definition
| entails assessing the quality and effectiveness of the organization’s corporate governance and reporting findings to interested stakeholders, including the board of directors, executives, auditors, regulatory agencies, and shareholders. |
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Term
| Sustainability of public companies |
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Definition
| the key to maximizing investor confidence. |
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Term
|
Definition
| Any act that lies beyond the authority of a corporation to perform; fall outside the powers that are specifically listed in a corporate charter or state law; can also be any action that is specifically prohibited by the corporate charter. |
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