...Harvard Law School John M. Olin Center for Law, Economics and Business Discussion Paper Series Harvard Law School 8-3-2004 The Institutions of Corporate Governance Mark J. Roe Harvard Law School Recommended Citation Roe, Mark J., "The Institutions of Corporate Governance" (2004). Harvard Law School John M. Olin Center for Law, Economics and Business Discussion Paper Series. Paper 488. http://lsr.nellco.org/harvard_olin/488 This Article is brought to you for free and open access by the Harvard Law School at NELLCO Legal Scholarship Repository. It has been accepted for inclusion in Harvard Law School John M. Olin Center for Law, Economics and Business Discussion Paper Series by an authorized administrator of NELLCO Legal Scholarship Repository. For more information, please contact tracy.thompson@nellco.org. ISSN 1045-6333 HARVARD JOHN M. OLIN CENTER FOR LAW, ECONOMICS, AND BUSINESS THE INSTITUTIONS OF CORPORATE GOVERNANCE Mark J. Roe Discussion Paper No. 488 08/2004 Harvard Law School Cambridge, MA 02138 This paper can be downloaded without charge from: The Harvard John M. Olin Discussion Paper Series: http://www.law.harvard.edu/programs/olin_center/ The Social Science Research Network Electronic Paper Collection: http://papers.ssrn.com/abstract_id=###### This paper is also a discussion paper of the John M. Olin Center's Program on Corporate Governance JEL K4, H73, G34, G28 The Institutions of Corporate Governance Mark...
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...Good Governance 1. INTRODUCTION: Governance implies control, direction, and rule with authority or administers laws to govern a system to achieve certain objectives. Good Governance implies running administration according to the defined laws to achieve the objective of promoting the welfare of the people in a democratic oriented order. Bad governance means departing from the norms of laws and subjecting system of administration to whims, idiosyncrasies of the rulers to achieve certain ulterior motives at the cost of national interests. The hallmark of great nations is that they learn from their past experience to become wiser in conducting their current and future affairs. Another distinctive feature of such nations is that they try to understand the emerging long-term trends to identify new challenges, and plan for the future so as to take maximum advantage of the opportunities and avoid the pitfalls that may lie ahead. On the other hand, the nations on the trajectory of decay and ultimate oblivion neither learn from the past nor have the inclination to look ahead into the future to plan for their security, progress and welfare. All it lacks in the context of Pakistan; socially, economically and politically as well. In the words of Mahbbub-ul-Haq, ‘Crisis in Governance’, “Human Development Report in South Asia”: “Governance is the exercise of political, economic and administrative authority to manage the resources of a country. It is always based upon certain rules...
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...Manual of Corporate Governance SEC Securities and Exchange Commission of Pakistan This manual is for reference only and does not constitute any legal requirement on companies, their officers, directors or auditors. This manual may be used for guidance and compliance must be ensured with the provisions of applicable laws and regulations. CONTENTS I. II. INTRODUCTION WHAT IS CORPORATE GOVERNANCE? (i) The Background (ii) Definition of Corporate Governance (iii) The Benefits of Corporate Governance (iv) The Pakistani Corporation (v) The Origins of Corporate Governance in Pakistan THE NEED FOR CORPORATE GOVERNANCE THE STAKEHOLDERS (i) General (ii) Shareholders (iii) Directors (iv) Employees (v) Creditors PROMOTING REFORM AND SHAREHOLDER ACTIVISM ROLE AND RESPONSIBILITIES OF DIRECTORS AND MANAGERS (i) Directors and Managers Distinguished (ii) Appointment and Proceedings of Directors (iii) Fiduciary Duties (iv) Powers and Responsibilities of Directors (v) Liability of Directors (vi) Executive and the Non-executive Directors (vii) The CEO 1 3 3 4 7 8 10 12 17 17 19 20 20 21 22 26 26 26 32 38 42 42 45 III. IV. V. VI. (viii) (ix) (x) (xi) The Company Secretary The CFO Internal Control System Reporting Requirements 47 49 49 50 VII. SCRUTINIZING FINANCIAL STATEMENTS - WHAT EVERY DIRECTOR SHOULD KNOW (i) General (ii) Liability of Directors (iii) Preparation of Financial Statements (iv) Tools for Directors' Review (v) How to Prevent Misleading and Fraudulent...
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...Slide 1 | | It is the bible for local government administration in the Philippines.Signed into law by the President of the Ph on Oct 10 1991 and took effect on Jan 1 1992The code does not apply in the ARMM, being an autonomous region, it has its own local government code.Consists of 536 sections divided into 4 books: Book 1 – policy statements, principles, processes and mechanisms for effective local governance Book 2 – taxing powers and other revenue raising powers and the corresponding administrative structures and processes necessary in the exercise of such powers Book 3 – details the local government structure and powers and duties of elective officials Book 4 – contains the transitory provisions that will effect the smooth implementation of the CodeIt sought to decentralized the Phil State. Decentralization is the transfer of power and authority from the central institution to the lower or local levels of a government system. Three main forms of Decentralization: Devolution refers to political or territorial decentralization wherein local governments are empowered for self- governance. Deconcentration is administrative decentralization and involves the delegation of responsibility of the central government agencies to the provincial, city and municipality governments and regional bodies. Debureaucratization is also the transfer of public functions and responsibilities but the transfer is made to the private sector and non-government organizations, not to local government...
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...of rules and practices by which a board of directors ensures accountability, fairness, and transparency in a company's relationship with its all stakeholders (financiers, customers, management, employees, government, and the community) The corporate governance framework consists of (1) explicit and implicit contracts between the company and the stakeholders for distribution of responsibilities, rights, and rewards, (2) procedures for reconciling the sometimes conflicting interests of stakeholders in accordance with their duties, privileges, and roles, and (3) procedures for proper supervision, control, and information-flows to serve as a system of checks-and-balances. Also called corporation governance. (Business Dictionary) An effective Board will positively influence shareholder value and enhance the reputation of the company as a constructive resource in the communities where it does business. Good governance practices will provide a framework for timely responses to issues affecting the Company and thereby maximize the effectiveness of the Board. The Board of Directors of the Company adopts these Principles for Corporate Governance to signal its strong commitment to good corporate governance practices. (Energy, 2013) The basic responsibility of the directors is to exercise their business judgment to act in what they reasonably believe to be in the best interests of the Company and its shareholders. In discharging that obligation, directors are entitled to rely on the honesty...
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... 1, 23–34, January 2007 CORPORATE GOVERNANCE IN MALAYSIA: THE EFFECT OF CORPORATE REFORMS AND STATE BUSINESS RELATION IN MALAYSIA Nor Azizah Zainal Abidin 1 and Halimah @ Nasibah Ahmad2 1 Faculty of Public Management and Law, 2 Faculty of Accountancy Universiti Utara Malaysia, 06010 Sintok, Kedah, Malaysia ABSTRACT The Asian Financial Crisis in 1997 not only introduced the term of corporate governance but also drew attention of the public about the weaknesses of Malaysian corporate governance practice. After 1998, Malaysian government decided to adopt corporate reform that could enhance the quality of good corporate management practice. This reform is clearly stated in the code and rules of corporate governance. The purpose of this research is to study the significance of implementing the code and rules of corporate governance since the public already realize the close relationship between business and politics. Three companies were chosen as indicators for this study. As a result, it was found that companies which are involved in corporate malpractice but have good relationship with states will always be excluded from the legal corporate action. Keywords: corporate governance, corporate reforms, political economy, state business relation INTRODUCTION Asian Financial Crisis in 1997 not only introduced the term of corporate governance but also drew attention of the public about the weaknesses of Malaysian corporate governance practice. After 1998, Malaysian government...
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...Law, Ethics, and Corporate Governance – LEG 500 | 201003 | Prerequisite: None | Quarter | Winter 2010 | Meeting Days/Time | Online course | Instructor | Dr. C. Phil Campos, MBA, JD | Instructor Phone | 214-202-8044 | Instructor E-mail | canuto.campos@strayer.edu | Instructor Office Hours/Location | 6pm – 7pm EST | Academic Office Phone NumberStrayer Online Technical SupportEcollege HelpDesk | 1-877-540-1733“As a student, you should choose 1 then 3 for academic issues from the automated menu.”1-877-642-2999“Used for problems entering the class”1-866-448-6703 or 1-303-873-0005“Used for problems once in the class” | INSTRUCTIONAL MATERIAL | Kubasek, N. K., Brennan, B. A., & Browne, N. (2009). The legal environment of business: A critical thinking approach (5th ed.). Upper Saddle River, NJ: Pearson-Prentice Hall.Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2010). Business ethics: Ethical decision making and cases (7th ed.). Boston: Houghton Mifflin Company/South-Western/Cengage Learning.PLEASE READ SYLLABUS PART II in the Course Home tab, it contains important University policies.GETTING TECHNICAL HELPTechnical questions regarding eCollege or classroom issues should be referred to helpdesk@strayeronline.net. Or you may phone the helpdesk at 1(866)448-6703.If the question regards a Strayer system, technical support can be reached at 1(877) 642-2999. Any technical inquiries sent to the instructor will, as a matter of course, be forwarded to the Helpdesk...
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...implications and are implicitly and explicitly based on law. Any omissions in the conduct of your duties on your part are also governed by law. Consider the basic governance of a health care setting and how your roles as a top administrator in this setting are affected by the legal system. A healthcare system is like any other organization or society in the instance that it needs rules, communication, and active acknowledgement of each person’s responsibilities and roles among those involved in the system to succeed. As administrators we must do what needs to be done in order to ensure that the system succeeds not only for the benefit of the health care organization itself but more importantly for those that depend on the system, the patients that need our care. Not only do we need to know what it takes to make a health care system work, but we also need to understand the law that the system needs to abide by and make sure those laws are put forth in our actions. According to the Dowton Consulting International Journal, some of the problems with the governance within the healthcare system are: “one of the elements (corporate or clinical governance) is weak or underperforming; the linkages between corporate and clinical governance are not understood and respected inside the organization; and the boundaries between corporate and clinical governance are not effectively managed.” Now the corporate layout is made up of policies, laws, rules, professionals, people, and their customs. If...
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...Good governance means an ideal governing system that is inevitable for political, economic, social and cultural development of a country. Ideal governing system means the ideal orientation of a state that works best to achieve self-reliance, sustainable development and social justice and the ideal functioning of government that operate most efficiently. The United Nations Development Program (UNDP- “Governance and Sustainable Human Development, 1977) has identified five basic principles of good governance, which are stated below: * Legitimacy and voice: All men and women should have a voice in decision-making either directly or through legitimate intermediate institutions that represent their intention. * Direction: Leaders and the public have a broad and long-term perspective on good governance and human development, along with a sense of what is needed for such development. * Performance: Institutions and processes try to serve all stakeholders and institutions produce results that meet needs while making the best use of resources. * Accountability: Decision makers in government, the private sector and civil society organizations are accountable to the public. * Fairness: All men and women have opportunities to improve and maintain their well-being and legal framework should be fair and enforced impartially, particularly the laws on human rights. Bangladesh constitution provides most of the essential elements for good governance though the country is...
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...the institute of cost accountants of india(ICAI) (A Statutory body under an act of parliament) SYLLABUS 2012 STRUCTURE & contents Evaluation Synthesis ANALYSIS ANALYSIS APPLICATION APPLICATION COMPREHENSION COMPREHENSION COMPREHENSION KNOWLEDGE KNOWLEDGE KNOWLEDGE LEVEL A LEVEL B LEVEL C FOUNDATION COURSE - Syllabus 2012 the institute of cost accountants of india(ICAI) (A Statutory body under an act of parliament) SYLLABUS 2012 STRUCTURE & contents The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) Page 1 FOUNDATION COURSE - Syllabus 2012 The Following table lists the learning objectives and the verbs that appear in the syllabus learning aims and examination question. Learning objectives Level A COMPREHENSION What you are expected to understand List Make a list of. State Express, fully or clearly , the details/ facts of. Define Give the exact meaning of. Communicate the key features of. Distinguish Highlight the differences between. Explain Make clear or intangible/state the meaning or purpose of. Identify Recognise, establish or select after consideration. Illustrate What you are expected to know Definition Describe KNOWLEDGE Verbs used Use an example to describe or explain something. The Institute of Cost Accountants of India (Statutory Body under an Act of Parliament) ...
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...ABSTRACT ECONOMIC GOVERNANCE IN PAKISTAN The paper’s main thesis is that the difficulty Pakistan has faced in maintaining macro-economic stability, sustaining economic growth and delivering public services to the poor can be ascribed to weak economic governance and gradual decline in the capacity of key institutions. To strengthen economic governance a non-partisan long term strategic approach is required in which narrow political considerations are set aside and a concerted effort is made to strengthen the key institutions that form the essential core of economic governance. As the capacity of these institutions takes several decades the temptation by incoming governments to abandon or neglect institutions or policies, projects and programs inherited from the previous regime should be seriously curbed. The tendency of starting with a clean slate every time a new government ushers in power without achieving tangible results is painful and also politically costly. It is better to build and consolidate on the previous programs and policies, fine tune and modify them according to the changed circumstances and experiences. The gains become visible during the incumbency period of the incoming government that can then claim credit for the realization of those achievements. The author is former Chairman, National Commission for Government Reforms and is currently Director Institute of Business Administration – Karachi 2 ECONOMIC GOVERNANCE IN PAKISTAN ISHRAT HUSAIN The...
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...Introduction Corporate governance could be defined as the system of regulating and overseeing corporate conduct and of balancing the interests of all internal stakeholders and other parties which are external stakeholders, governments and local communities who can be affected by the corporation's conduct, in order to ensure responsible behavior by corporation and to achieve the maximum level of efficiency and profitability for a corporation. (Jean, Anil and Mirko 2011, pp.10). Therefore, the corporate governance framework consists of explicit and implicit contracts between the company and the stakeholders for distribution of responsibilities, rights, and rewards; the procedures for reconciling the sometimes conflicting interests of stakeholders in accordance with their duties, privileges, and roles; and procedures for proper supervision, control, and information-flows to serve as a system of checks-and-balances. (businessdictionary.com 2012) Starbucks Company and British Petroleum Plc are chosen to explain and discuss on good corporate governance; meanwhile Enron is chosen to explain and discuss on bad corporate governance. Since Starbucks and Enron are incorporated in the United States of America (USA), therefore these two companies will be used to compare how they governance their company under principle of corporate governance of America. Corporate Governance in United States (US) In United States, after have various corporate scandals, corporate governance has rising to the...
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...analytic, integrative and morally balanced person. exhibits higher ethical standards like open-mindedness, rational thinking, evidenceoriented personality and problem solving skills with high professional spirit. tends to be more participatory in socio-economic and political endeavors will be practical, highly concerned, responsible and loyal to his/her nation Course Objectives At the end of this course, students will be • familiar with key concepts like civics, ethics and profession • equipped with basic knowledge, skills and attitude of socio-economic and political issues of their country • familiar with government institutions, policies, strategies and legal provisions of their country • able to analyze the dynamics of socio-economic and political transformations of their country • able to develop the knowledge of work habit; professional, environmental, development and public service ethics, and their repercussions • familiarized with foundations of democracy and good governance and tools of democratization process • able to assess the values of multi-culturalism and tolerance for mutual understandings and co-existence • able to gain an increased awareness of the opportunities and challenges of globalization Course Outline Chapter One: Civics and Ethics for Professionals 1.1. Conceptual frame work of Civics and Ethics 1.2. Civics, Ethics and Citizenship 1.3. Relations of Ethics, Civics and Profession 1.4. The development of civics, ethics and profession in Ethiopia 1.5....
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...lack of it. We have lowest literacy rate among the SAARC countries and do make it better for past few decades. The reason behind this phenomenon is inefficient policy making related to education sector. Every government wanted to make good policy but failed to do. But, it is need of time that a precise and efficient education related policy would be made for the betterment of the people as well as for the prosperity of Pakistan. 3. Health Related Policies; A better health services is the basic and fundamental rights of all citizen of this country as mentioned in the constitution of Pakistan. But unfortunately, all the government regardless civil or military has been failed to provide a better health facilities to the people of this country. Since, through a proper and well-organized policies can be used for the betterment of the people of Pakistan in respect to the health. It is better to make available the consent of all stakeholders while making a policy flaws free and un-chaos. 4. Governance Related...
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... Corporation Law BULAW 5915 1/22/2013 Suneel Younis Mughal Ub 300 92 001 1.0 Corporate Governance Corporate Governance practice aim to ensure that the board is accountable to stakeholders, especially shareholders, and that management is accountable to the board (Lipton, Herzberg & Welsh, 2010).It is helpful to an understanding of corporate governance to appreciate that it is concerned with how corporate entities are governed as distinct from the way the businesses within those entities are managed. Governance relates to where the company is going. Management is concerned with getting the company there. This distinction is central is determining the role and function of the board and its relationship with management (Lipton et al., 2003). In the ASX Corporate Governance is described as “the framework of rules, relationships, systems and processes within and by which authority is exercised and controlled in corporations. It encompasses the mechanisms by which companies, and those in control, are held to account. Corporate governance influence how the objectives of the company are set and achieved, how risk is monitored and assessed, and how performance is optimised (Lipton et al., 2003). There is no single model of good corporate governance. The eight core principles that the ASX Corporate Governance Council believes underlie good corporate governance. 1. Lay solid foundation for management and oversight-Fundamental to any corporate governance structure is...
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