about corporate governance

1. Welcome
To
Finance

2. Presentation topic
Is
Corporate governance

3. TOPICS TO BE COVERED
What Is Corporate Governance ?
Objectives Of Corporate Governance
Importance Of Corporate Governance
Parties To Corporate Governance
Control And Ownership Structures
Systematic Problem Of Corporate Governance
Debates In Corporate Governance

4. WHAT IS CORPORATE GOVERNANCE
Corporate governance is the set of processes, customs,
policies, laws and institutions affecting the way in
which a corporation is directed, administered or
controlled.
Corporate governance structure specifies the
distribution of rights and responsibilities among
different participants in the corporation
Corporate governance also includes the relationships
among the many players involved and the goals for
which the corporation is governed.

5. PRINCIPAL PLAYERS
1. Shareholders
2. Management
3. Board of directors

6. Objectives Of Corporate Governance
the fundamental objectives of corporate governance is
to enhance shareholders value and protect the interests
of other stakeholders by improving the corporate
performance and accountability.
To develop an efficient organization culture
To protect and promote the interest of shareholder
To create social responsibility
It is integral to the very existence of a company and
strengthens investors confidence by ensuring
commitment to higher growth and profit.

7. Importance Of Corporate Governance
Corporate governance is an important aspect of
business.
It helps streamline the process and gives people
accountability.
The point of corporate governance is to the decision
making process.
One of the main goal is to clearly explain to the
board, the stakeholders and the shareholders what
their duties and responsibilities are within the
company.
Accountability is what helps people within the
company make decision.

8. • Fairness
• Transparency
• Risk Management
• Responsibility
• Accountability
The Principles of Corporate Governance

9. Good corporate governance-aim
The aim of good corporate governance is to
ensure commitment of the board in managing
the company in a transparent manner for
maximizing long term value of the company for
its shareholders and all other partners.
“Good corporate
governance is
simply good
business”

10. • Account Ability Of both internal &
extrenal:Good Corporate Governance enforces to
be accountable.
• Recognition of stakeholders shareholders
rights:Their interest must be preserved.
• Transparency:It should be done in an open way.
• Legal Compliance:The process must be
maintained legally.
• Ongoing financial scrutiny and control:A
continuous process with examine and evaluate the
system.
Elements of good corporate governance

11. Vendor
s
Board
of
director
s Shareh
olders
Employ
ment
Credito
r
Govern
ment
Parties of
corporate
governan
ce
Parties to corporate governance

12. Parties to corporate governance
Board Of
Directors
A board of directors is responsible for oversight of
managements performance acting in the best interests of all
shareholders.
The board has the responsibility of endorsing the
organizations strategy developing directional policy,
appointing, supervising and remunerating senior executives
and ensuring accountability of the organization to its investors
and authorities.

13. Parties to corporate governance
The employees
Strengths the system of human resource
management.
Increase the labor motivation.
Raises lawfulness and authority of the decision
making.
Improves the corporate culture.
Contributes to economic grow and social stability .

14. Parties to corporate governance
The shareholders
Shareholders provides capital approve major
transaction and elect directors of the board but they are
not involved in the day to day management of the
company.

15. Parties to corporate governance
Management Team
The CEO and senior executives are responsible for the day to
day operation of the corporation.
The role of management is to support the chief executive
officer and implement the running of the general operation and
financial business of the company in accordance with the
delegated authority of the board.

16. Control and ownership structures
Control and possession construction alludes to the kinds and
constitution of stakeholders within a company.
Dual class
shares
Proxy
votes
Voting
coalition
Ownership
pyramid

17. Company issues two classes of shares. Class A & Class B.
Dual class stock is intended to give specific shareholders
voting control.
Dual class stock structures are controversial.
Supporters feel that the structure allows strong leadership to
put long term interests.
Opponents of dual class structures feel it allows a small
group of privileged shareholders to maintain control while
other shareholders( with less voting power) provides the
majority of the capital.
DUAL CLASS SHARES

18. 13%
54.4%
36%
88%
Shares: Shares:
Voting Rights: Voting Rights:
Mark Zuckerberg Spiegel and Murphy
Snap
Meta

19. OWNERSHIP PYRAMID
Pyramidal ownership structure is defined as an
entity whose ownership structure displays a top
down chain of control.
The separation of actual ownership and control
occurs because the pyramid structure enables the
ultimate owners to establish control
disproportionately to the amount of ownership
firms.

20. Pesenti
Family
Italcementi
Ownership Voting
32% 54%
Franco Tosi
Ownership Voting
62% 62%
Cementerie Siciliane
Ownership Voting
74% 74%
Cementerie DI Sardegna
Ownership Voting
78% 78%
ITALMOBILIARE
Ownership Voting
29% 45%

21. VOTING COALITION
A voting coalition or voting pool consists of
several shareholders agreeing to vote in the same
way.
Voting coalitions are rare, especially those that
persist in the long term. One reason for the
infrequency of voting coalitions may be the costs
imposed by regulation.

22. Proxy voting
A ballot cast by one person on behalf of another.
One of the benefits of being a shareholder is the
right to vote on certain corporate matters.
Since most shareholders cannot or do not want to
attend the annual and special meeting at which the
voting occurs corporation provide shareholders with
the option to cast a proxy vote.

23. Internal corporate governance control
Internal corporate governance controls play a vital role in ensuring the
success of a business organization and preventing corporate fraud.
Internal control activities that ensure proper corporate governance
include:
Monitoring by board
Internal audits and robust policies
Proper balance of power
Performance based remuneration
Monitoring by large shareholders and other stakeholders

24. External corporate governance controls
External stakeholders play an important role in ensuring
proper corporate governance processes in a business
organization.
Some of the key external corporate governance controls:
Government regulations
Media exposure
Marker competition
Takeover activities
Public release and assessment of financial statements

25. SYSTEMATIC PROBLEM OF CORPORATE GOVERNANCE
Demand for information: In line to impact the directors the
stockholders should roll into one with other ones to shape a polling cluster
that may pose a actual menace of bearing intentions either designating
directors at a common gathering.
Monitoring costs: A obstacle to stockholders utilizing high quality
data is the outlay of handling it particularly to a not so large stockholder.
Supply of bookkeeping information: Financial accounts shape a
vital link in activating suppliers of funding to screen directors.

26. Debates In Corporate Governance Executive Pay
Top corporate executives have always been well paid for
obvious reasons.
Running a major corporation is a demanding job; you would
expect to pay a high salary to get and retain talented
hardworking people.
CEOs generally can count on big paychecks in good times
and bad. They tend to do well even when their companies do
poorly ; although they can expect to do better when corporate
profits or stock prices rise.