Você está na página 1de 12

MBAZ518: CORPORATE INTEGRITY AND ETHICS

ASSIGNMENT 2 1. Outline the roles of the following in relation to corporate governance. (a) Company Secretary (b) Nominations Committee (c) Audit Committee (d) Shareholders of a company (8) (8) (8) (9)

2. Discuss corporate responsibility vs social responsibility of a company giving, in each case, a) two illustrations of such responsibilities and b) two benefits of fulfilling such responsibility. (17)

TABLE OF CONTENTS

Page number Question 1 Definition of key terms .3 Roles in corporate governance Company secretary 3-4 Nominations committee .4-5 Audit committee .5-6 Shareholders of a company 6-7 Bibliography ..8

Question 2 Discussion of corporate responsibility and social responsibility ..9 Illustrations of such responsibilities CSR..9-10 Benefits 10 SR10 Benefits.11 Bibliography..........12

Question 1 Definition of key terms Corporate governance is the system that deals with conflicts of interests between the providers of finance and the managers; the shareholders and the stakeholders; different types of shareholders (mainly the large shareholder and the minority shareholders) and the prevention or mitigation of these conflicts of interests (www.wikipedia.Corporategovernance - KnowledgeEncyclopedia - faqs_org.mht, 2012). Company secretary is a senior position in a private or public organisation, normally in the form of a managerial position or above. A nominations committee is a group of directors selected from the Board that is responsible for proposing to the board, in the first instance, any new appointments, whether of executive or of non-executive directors. According to the Cadbury committee (1992:26) it should be composed of a majority of non-executive directors.

Audit committee is an operating committee of a company`s board of directors that is in charge of overseeing financial reporting and disclosure (www.investopedia.com/terms/a/audi t-committee, 2012).

Shareholders are individuals, groups of individuals, and organizations that own one or more shares in a company (www.businessdictionary.com/definition/shareholder.html, 2012).

Role is the function assumed or played by a person or thing in a particular situation (www.thefreedictionary.com/role, 2012).

Roles of company secretary in corporate governance According to the king code III (2009:29) of South Africa the company secretary should: 1. have an arms-length relationship with the board;
2. 3.

assist the nominations committee with the appointment of directors; assist with the director induction and training programmes;

4. provide guidance to the board on the duties of the directors and good governance; 5. ensure that board and committee charters are kept up-to-date; 6. prepare and circulate board papers; 7. elicit responses, input, feedback for board and committee meetings; 8. assist in drafting yearly work plans; 9. ensure preparation and circulation of minutes of board and committee meetings; 10. assist with the evaluation of the board, committees and individual directors.

Roles of nominations committee in corporate governance According to http://www.scigames.com/sections/corporate-governance/nominating -andcorporate-governance-comittee-charter.aspx (2012) the nominations committee is supposed to perform the following roles: 1. Review and make recommendations to the Board annually with respect to the composition, size and needs of the Board. 2. Recommend criteria for Board membership, including the minimum qualifications for a nominee and the qualities and skills that the Committee believes are necessary or desirable for a Board member to possess. 3. Lead the search in identifying individuals qualified to become Board members. Before recommending a nominee, review and conduct the appropriate and necessary inquiries into the backgrounds and qualifications of possible candidates for director. 4. Recommend a slate of director nominees for approval by the Board and election by the stockholders in connection with the Annual Meeting of Stockholders. Recommend new directors for approval and election by the Board to fill vacancies on the Board, including any newly created directorships, as needed. 5. Review stockholder nominations for candidacy to the Board, if any, and any shareholder proposals affecting corporate governance, and make recommendations to the Board accordingly. 6. Review the composition of each committee of the Board and present recommendations to the Board for committee memberships annually and to fill
4

vacancies as needed. 7. Review planning for succession to the position of Chairman of the Board and Chief Executive Officer and other senior management positions. To assist the Committee with this responsibility, the Chief Executive Officer will annually provide the Committee with recommendations and evaluations of potential successors to succeed him or her and other members of senior management. 8. Periodically review overall corporate governance principles, procedures and practices of the company and make recommendations to the Board as appropriate. 9. Periodically review and report to the Board on the effectiveness of corporate governance procedures and the Board as a governing body, including conducting an annual self-assessment of the Board and its standing committees. Annually review and evaluate the Committees performance under the nominations committee Charter.

Roles of the Audit Committee The Cadbury report (1992:71-72) outlines the roles of the audit committee as follows: 1. to consider the appointment of the external auditor, the audit fee , and any

questions of resignation or dismissal;

2. to discuss with the external auditor before the audit commences the nature and

scope of the audit, and ensure co-ordination where more than one audit firm is involved;
3. to review the half-year and annual financial statements before submission to

the Board, focusing particularly on: (i) any changes in accounting policies and practices (ii) major judgemental areas (iii) significant adjustments resulting from the audit (iv) the going concern assumption (v) compliance with accounting standards (vi) compliance with stock exchange and legal requirements.

4. to discuss problems and reservations arising from the interim and final audits,

and any matters the auditor may wish to discuss (in the absence of management where necessary);

5. to review the external auditors management letter and managements

response;
6. to review the companys statement on internal control systems prior to

endorsement by the Board;


7. (where an internal audit function exists) to review the internal audit

programme, ensure co-ordination between the internal and external auditors, and ensure that the internal audit function is adequately resourced and has appropriate standing within the Company;
8. to consider the major findings of internal investigations and managements

response;

9. to consider other topics, as defined by the board.

Roles of shareholders 1. To elect the directors to constitute the Board ;

2. To approve the companys remuneration policy;

3. To influence as owners and to ensure that the companies in which they have invested comply with ethics code of conduct;

4. To appoint the auditors to provide an external check on the directors financial statements;

5. To comment and put up their questions to reports and accounts presented at Annual General Meetings; 6. To remove non performing directors from office;

7. To pass or deny resolutions at general meetings by voting through their shareholder capacity;

8. To perform certain acts that can only be done by shareholders such as changing the name of the company, changing the shareholding structure, or authorising a service contract for a director;

9. To attend meetings and discuss whatever is on the agenda to ensure the directors do not go beyond their powers.

Bibliography
www.wikipedia.Corporate governance - Knowledge Encyclopedia - faqs_org.mht (2012), (retrieved on 17/4/12)

Cadbury committee (1992), THE F INANCIAL ASP ECTS OF CORPORATE GOVERNANE, First publication, Burgess Science Press: Great Britain, ISBN 0 85258 913 1.

www.investopedia.com/terms/a/audi t-committee (2012), (retrieved on 18/4/12)

www.businessdictionary.com/definition/shareholder.html (2012), (retrieved on 12/4/12)

www.thefreedictionary.com/role (2012), (retrieved on 28/3/12)

http://www.scigames.com/sections/corporate-governance/nominating -and-corporategovernance-comittee-charter.aspx (2012), (retrieved on 30/3/12)

king code III (2009), KING CODE OF GOVERNANCE FOR SOUTH AFRICA 2009

Question 2

Corporate responsibility can be defined as how companies address the social, environmental, and economic impacts of their operations and so help to meet society`s developmental goals, it is also known as corporate social responsibility (CSR) (www.iso.org/sr, 2012). To be more specific CSR is the voluntary actions that businesses can take, over and above minimum legal requirements, to address both its competitive interests and the interests of wider society. According to www.ventureneer.com (2012) social responsibility (SR) is defined as the obligation corporations, organizations, and individuals have to society. Hence, CSR is a subset of SR because SR looks beyond corporations` responsibility to include individuals within them. SR encompasses both business (CSR) and personal sides (Individual social responsibility). Government has a role in setting standards in areas such as environmental protection, health and safety and employment rights. It can also provide an institutional framework that stimulates companies and individuals to be socially responsible. Hence, both CSR and SR can be influenced by government regulation or by codes of ethics such as the King Code III and the Cadbury Report. Individuals who are proponents of Individual social responsibility (ISR) are catalysts for social enterprises and stimulate corporate changes aimed at engaging in CSR. CSR and SR are highly related that the two terms can be used synonymously. They involve acting with sensitivity, being aware of the impact of the company`s actions on others particularly the disadvantaged. Corporate social responsibility (a) Illustrations Marange Resources (Pvt) Ltd on 24 February 2012 unveiled an estimated three million American dollars sponsorship package for women's soccer at all levels in Zimbabwe. Marange
Resources will take care of the teams' travelling and home match expenses, and will provide kit for the national team. The sponsorship deal is part of the company`s CSR strategy.

Puma energy a petrol and diesel retailer has adopted locally produced blend petrol as its major product. Blend fuel has been proved to release less hydro-carbons into the atmosphere as compared to conventional fuels. Hence, such a move will help reduce the detrimental impact of exhaust emissions on the ozone layer. Puma energy is displaying CSR by taking the move to protect the environment. (b) Benefits 1. improved share price. Marange diamonds receives wide media coverage as it is now associated with Women`s soccer. This enhances its public image with the potential to raise its share price on the Zimbabwe Stock Exchange. 2. Increased profits. Puma energy will increase the volume of its sales as more Zimbabweans aspire to save the environment and thus purchase blend petrol.

Social responsibility (a) While the chocolatiers in Switzerland, Belgium, and the United States live the high life, the cocoa farmers in Madagascar live subsistence lives. Tim Mc Collum and Brett Beach owners of Medecasse a chocolate manufacturing company decided to be socially responsible by bringing the art of making chocolate to where the cocoa beans are grown. These socially responsible entrepreneurs moved the higher value links in the chocolate chain to Madagascar. The company`s chocolate is produced and packaged in Madagascar to keep the economic benefit within the country. By reducing the number of middlemen, the company has ensured that farmers get a better price for their cocoa. Madecasse also provides technical information and tools to the first links in the value chain- the farmer- to ensure the quality of the chocolate.

Dan Pallotta owner of for-profit American company Pallotta Team works, invented two highprofile events: AIDS Ride and Breast cancer 3-Days, which raise money for AIDS and breast cancer patients globally. His efforts are to augment those of philanthropist Bill Gates who is a leading donor in the fight against AIDS (Acquired Immune Deficiency Syndrome). Pallotta took it upon himself to galvanize individuals to carryout fund raising for global AIDS and breast cancer patients, using his private firm only as a vehicle for marketing his goal.
10

(b) Benefits 1. Enhanced public image. Dan Pallotta`s company was a case study for the Harvard Business Week magazine. 2. Increased customer base. More than one hundred and eighty thousand people recruited into fundraising activities over five years ultimately become clients to Pallotta Team Works as they believe in the company`s cause. 3.Competitive advantage. Medecasse`s chocolate is rated amongst the best in the United states of America. By being socially responsible Tim and Brett added value where it matters, that is to the farmers. Due to technical support to the farmers they managed to improve the quality of their main input (cocoa). 4. Increased production. Farmers where motivated by the move to produce chocolate in their country so they produced more cocoa which increased cocoa supply to the chocolate factory.

11

Bibliography www.iso.org/sr (2012), (retrieved on 16/4/12) www.ventureneer.com (2012), (retrieved on 14/4/12)

12

Você também pode gostar