Corporate Governance Principles
Expert-defined terms from the Certified Professional in Corporate Governance for Executive Assistants (United Kingdom) course at London School of Business and Administration. Free to read, free to share, paired with a professional course.
Accountability, in the context of corporate governance, refers to the res… #
Related terms include transparency, compliance, and oversight. The concept of accountability is essential in ensuring that the company is managed in a responsible and ethical manner. For example, companies are required to disclose their financial statements and other relevant information to the public, which helps to promote accountability and transparency.
Agency Theory, a concept in corporate governance, refers to the relations… #
Related terms include stewardship theory and principal-agent problem. The agency theory suggests that the agent may not always act in the best interest of the principal, which can lead to conflicts of interest and poor decision-making. For instance, executives may prioritize their own interests over those of the shareholders, which can result in inefficient decision-making.
Annual General Meeting (AGM), a crucial event in corporate governance, re… #
Related terms include extraordinary general meeting and shareholder meeting. The AGM provides an opportunity for shareholders to engage with the board of directors and executives, ask questions, and hold them accountable for their actions. For example, shareholders can vote on the election of board members, approval of audited financial statements, and other significant matters.
Audit Committee, a key component of corporate governance, refers to the c… #
Related terms include audit firm, internal audit, and financial reporting. The audit committee plays a critical role in ensuring the accuracy and reliability of the company's financial statements, which helps to promote transparency and accountability. For instance, the audit committee can engage an independent audit firm to conduct an external audit of the company's financial statements.
Board of Directors, the governing body of a company, refers to the group of indi… #
Related terms include executive directors, non-executive directors, and chairman. The board of directors is responsible for making key decisions, such as appointing executives, setting remuneration packages, and overseeing risk management. For example, the board of directors can establish a nomination committee to identify and appoint new board members.
Business Ethics, a fundamental aspect of corporate governance, refers to… #
Related terms include social responsibility, compliance, and integrity. Business ethics is essential in promoting a positive corporate culture, building trust with stakeholders, and ensuring long-term sustainability. For instance, companies can establish a code of conduct to outline the expected behavior of employees and executives.
Chief Executive Officer (CEO), the highest #
ranking executive in a company, refers to the individual responsible for overseeing the company's strategic direction, operations, and performance. Related terms include chief financial officer, chief operating officer, and executive team. The CEO plays a critical role in driving the company's growth, innovation, and success. For example, the CEO can establish a leadership team to oversee the implementation of the company's strategy.
Compliance, a critical aspect of corporate governance, refers to the proc… #
Related terms include regulatory compliance, internal controls, and risk management. Compliance is essential in minimizing the risk of non-compliance, which can result in significant fines, reputational damage, and financial losses. For instance, companies can establish a compliance function to oversee the implementation of regulatory requirements.
Corporate Governance, the system of rules, practices, and processes that… #
Related terms include corporate social responsibility, stakeholder engagement, and transparency. Corporate governance is essential in promoting long-term sustainability, building trust with stakeholders, and ensuring the company's success. For example, companies can establish a governance framework to outline the roles and responsibilities of the board of directors, executives, and employees.
Corporate Social Responsibility (CSR), a key aspect of corporate governan… #
Related terms include sustainability, stakeholder engagement, and philanthropy. CSR is essential in promoting a positive corporate image, building trust with stakeholders, and ensuring long-term sustainability. For instance, companies can establish a CSR function to oversee the implementation of social and environmental initiatives.
Director's Duties, the legal and fiduciary obligations of directors, refe… #
Related terms include fiduciary duty, care and skill, and conflicts of interest. Directors' duties are essential in ensuring that the company is managed in a responsible and accountable manner. For example, directors can establish a code of conduct to outline their roles and responsibilities.
Disclosure, the process of providing transparent and accurate info… #
Related terms include financial reporting, audit committee, and transparency. Disclosure is essential in promoting transparency, accountability, and trust with stakeholders. For instance, companies can establish a disclosure policy to outline the types of information that will be disclosed to the public.
Executive Compensation, the remuneration package for executives, refers t… #
Related terms include performance-based pay, equity incentives, and executive benefits. Executive compensation is essential in attracting and retaining top talent, promoting performance, and ensuring long-term sustainability. For instance, companies can establish a remuneration committee to oversee the design and implementation of executive compensation packages.
Financial Reporting, the process of providing accurate and reliable</i… #
Related terms include audited financial statements, financial analysis, and accounting standards. Financial reporting is essential in promoting transparency, accountability, and trust with stakeholders. For example, companies can establish a financial reporting function to oversee the preparation and disclosure of financial statements.
Governance Framework, the system of rules, practices, and processes that… #
Related terms include corporate governance, stakeholder engagement, and transparency. The governance framework is essential in promoting long-term sustainability, building trust with stakeholders, and ensuring the company's success. For instance, companies can establish a governance committee to oversee the implementation of the governance framework.
Internal Control, the processes and procedures that ensure the company's… #
Related terms include internal audit, control environment, and risk assessment. Internal control is essential in minimizing the risk of non-compliance, which can result in significant fines, reputational damage, and financial losses. For example, companies can establish an internal audit function to oversee the implementation of internal controls.
Leadership, the process of inspiring and motivating employees to a… #
Related terms include strategic leadership, transformational leadership, and executive development. Leadership is essential in promoting a positive corporate culture, building trust with stakeholders, and ensuring long-term sustainability. For instance, companies can establish a leadership development program to identify and develop future leaders.
Nomination Committee, the committee responsible for identifying and appointing n… #
Related terms include board composition, diversity, and independence. The nomination committee is essential in ensuring that the board of directors has the necessary skills, experience, and expertise to oversee the company's strategy and direction. For example, companies can establish a nomination committee to identify and appoint new board members.
Operational Risk, the risk of loss or damage resulting from inadeq… #
Related terms include risk management, internal control, and compliance. Operational risk is essential in minimizing the risk of non-compliance, which can result in significant fines, reputational damage, and financial losses. For instance, companies can establish an operational risk management function to oversee the identification and mitigation of operational risks.
Performance Management, the process of evaluating and improving em… #
Related terms include performance appraisal, goal setting, and reward systems. Performance management is essential in promoting a positive corporate culture, building trust with stakeholders, and ensuring long-term sustainability. For example, companies can establish a performance management system to oversee the evaluation and improvement of employee performance.
Remuneration Committee, the committee responsible for overseeing the design and… #
Related terms include executive pay, performance-based pay, and equity incentives. The remuneration committee is essential in promoting fairness and transparency in executive compensation, which helps to build trust with stakeholders and ensure long-term sustainability.
Risk Management, the process of identifying, assessing, and mitigating ri… #
Related terms include risk assessment, risk mitigation, and internal audit. Risk management is essential in minimizing the risk of non-compliance, which can result in significant fines, reputational damage, and financial losses. For example, companies can establish a risk management function to oversee the identification and mitigation of risks.
Stakeholder Engagement, the process of communicating and engaging … #
Related terms include stakeholder value, shareholder engagement, and corporate governance. Stakeholder engagement is essential in promoting a positive corporate image, building trust with stakeholders, and ensuring long-term sustainability. For example, companies can establish a stakeholder engagement function to oversee the communication and engagement with stakeholders.
Strategic Planning, the process of developing and implementing a company'… #
Related terms include strategic management, business planning, and leadership development. Strategic planning is essential in promoting a positive corporate culture, building trust with stakeholders, and ensuring long-term sustainability. For instance, companies can establish a strategic planning function to oversee the development and implementation of the company's strategic plan.
Sustainability, the ability of a company to endure and thrive over… #
Related terms include sustainable development, corporate social responsibility, and stakeholder engagement. Sustainability is essential in promoting a positive corporate image, building trust with stakeholders, and ensuring long-term sustainability. For example, companies can establish a sustainability function to oversee the implementation of sustainable practices and initiatives.
Transparency, the process of providing accurate and reliable infor… #
Related terms include disclosure, financial reporting, and governance framework. Transparency is essential in promoting trust with stakeholders, ensuring long-term sustainability, and minimizing the risk of non-compliance. For instance, companies can establish a transparency policy to outline the types of information that will be disclosed to the public.
UK Corporate Governance Code, the code of best practices for corporate… #
The UK Corporate Governance Code is essential in promoting a positive corporate image, building trust with stakeholders, and ensuring long-term sustainability.