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Corporate Governance MBA Assignment

   

Added on  2021-02-19

9 Pages2531 Words238 Views
MBA- CORPORATEGOVERNANCE

INTRODUCTIONThe corporate governance plays a very important role in the organisation which is willdecide the organisation's success. The corporate governance can influence the managementdecision and also the activities and planning of the management depends upon corporategovernance. Corporate governance sets rules, laws, of business and also how these all areoperated, controlled and also regulated in the organisation. Here the organisation is taken as Goldlimited, where the impact of the corporate governance is shown (Cohen, Holder-Webb andKhalil, 2017).QUESTION 1Gold limited is a multinational corporation that is operating in many locations.. TheAmerican Sarbanes-Oxley Act of 2002, came into force to protect the investors from any fraudreporting of financial statements by the corporation. This act came in to force just because offraud activities done by companies such as Enron, Tyco etc. They showed high profits and whichresulted in more and more investment by the investors. This act questioned the CPA and thelicence of the CPA was taken away. This act set strict rules to the Accountants and Auditors.This Act is of USA.According to the American mandatory Corporate governance regime whichis rule based and it is very different from UK and Australia which is Principle based as takinginto factor the approach of the corporate governance. Under the UK the substantial shareholdercan be a director which is independent unlike US which consist of minimum 3 independentdirectors. UK and Australia do not include performance related remuneration which inhappening in the Gold limited where the accounting method is used as conservative accountingmethods which is not considering the performance of the CEO or understating the performanceof the CEO(Dignam and Galanis, 2016). It will ultimately result in remuneration problem to theCEO. Contrasting the US laws which allows Remuneration on performance basis in the form ofstock option. UK and Australian corporate governance is principal based in which company’s directorsdescribe the way they have applied principles of corporate governance in language of their ownwhich is different in USA where the company have to do it by set rules. Principle approach isbeneficial because the director of the company is not required to follow the set rules rather theycan use their own approach to deal with stating the approach Which involves the report to behaving more meaning rather than specific details involved in it. In UK the practice of code can1

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