Although there are many different cultural and legal approaches used in corporate governance worldwide, there is a growing consensus on what constitutes good corporate governance

Question

List and explain at least three standardized common principles of good corporate governance.
What will be an ideal response?

Answer 1

Answer: 1) A board of directors that has both internal and external members. More importantly, it should be staffed by individuals of true experience and knowledge of not only their own rules and responsibilities, but of the nature and conduct of the corporate business. 2) A management compensation system that is aligned with corporate performance (financial and otherwise) and has significant oversight from the board and open disclosure to shareholders and investors. 3) Independent auditing of corporate financial results on a meaningful real-time basis. An audit process with oversight by a Board committee composed primarily of external members would be an additional significant improvement. 4) Timely public reporting of both financial and nonfinancial operating results that may be used by investors to assess the investment outlook. This should also include transparency and reporting around potentially significant liabilities.