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    Governance A1

    Uploaded by

    Joyce Mirabueno
    Governance

    Copyright:

    © All Rights Reserved
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    Governance A1

    Uploaded by

    Joyce Mirabueno
    10 views2 pages
    Governance

    Original Title

    GovernanceA1

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    © © All Rights Reserved

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    Governance

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    10 views2 pages

    Governance A1

    Uploaded by

    Joyce Mirabueno
    Governance

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    You are on page 1of 2

    Corporate Governance

    Activity #1

    I. “Small business enterprises do not need good governance.” Do you agree? Why or
    why not?

    I strongly disagree. All businesses need good governance, regardless of the


    size, nature, and type of the business. Good governance gives direction to the
    business, enabling it to implement wise decisions in managing its resources and the
    like. It serves as the foundation for achieving its goals. Without it, it is less likely for a
    business to run smoothly and be successful since it will cause chaos in its day-to-day
    operations, leading to losses and, at worst, bankruptcy.

    II. Why do companies have to have a competent set of Board of Directors?

    Companies need to have a competent set of Board of Directors since they are
    the governing body of a business. They are mostly in-charge of setting strategies,
    overlooking management, and making decisions for the benefit of the business.
    Having competent ones would enable wise decisions and solutions under certain
    circumstances that might greatly impact the business and lead to positive outcomes.

    III. TRUE OR FALSE. If false, identify the word or phrase that renders the sentence
    false.

    FALSE 1. Stakeholders are any individual, organization, or society at large who can
    either affect or not be affected by the company’s strategies, policies, and business
    decisions.

    TRUE 2. Internal Control is a process designed and effected by the board of


    directors, senior management, and all levels of personnel to provide reasonable
    assurance on the achievement of objectives through efficient and effective
    operations.

    FALSE 3. The Securities and Exchange Commission approved the code of


    Corporate Governance for publicly listed companies on October 10, 2016.

    TRUE 4. The goal of the SEC in approving the code of Corporate Governance is to
    help companies develop and sustain an ethical corporate culture and keep abreast
    with recent developments.

    FALSE 5. The Code of Corporate Governance will not adopt the “comply or explain”
    approach.

    FALSE 6. When a recommendation is not complied with, the company must not
    disclose and describe this non-compliance and need not to explain how the overall
    principle is being achieved.
    TRUE 7. A director who has executive responsibility for the day-to-day operations
    of a part or the whole organization is an executive director.

    FALSE 8. The Board should be secondarily responsible for approving the selection
    and assessing the performance of the Management.

    FALSE 9. The Audit Committee should allow any non-audit work that will conflict
    with his duties as an auditor or may pose threats to his independence.

    TRUE 10. The Audit Committee coordinates, monitors, and facilitates compliance
    with laws, rules, and regulations.

    FALSE 11.The board should at least have three independent directors, or such
    number as to constitute at least one-half of the members of the Board, whichever is
    lower.

    FALSE 12. The positions of the Chairman of the Board and Chief Executive Officer
    should be held by the same individual.

    FALSE 13. Members of the Board are duty-bound to apply high ethical standards,
    taking into account their own interests and not that of the stakeholders.

    TRUE 14. The Audit Committee should be alert for any potential conflict of interest
    situations given the guidelines or policies on non-audit services, which could be
    viewed as impairing the external auditor’s objectives.

    FALSE 15. Establishing effective communication with the external auditor and
    requiring them to report all irrelevant matters helps the Audit Committee to efficiently
    carry out its oversight responsibilities.

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