Governance

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CORPORATE GOVERNANCE CG 601
PROJECT PAPER
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STUDENT NAME: MARK MISOMALI

STUDENT ID NO: 24ELI-11765

INTAKE AND VENUE: EVENING 24, LILONGWE

LECTURER’s NAME: GAW KACHALI

DATE SUBMITTED: DECEMBER 01, 2011

PREFACE
Many organizations of private or public nature are not spared from the risks of fraud and corruption. The complex business processes make it impossible to find a common solution for combating fraud and corruption. Even in similar business processes the nature of fraud and corruption cannot be predicted. As a result of this a lot of resources are lost, wasted, and abused. Other organizations have put in strict punitive measures for the culprits but still this has not relatively reduced incidences of fraud and corruption. There is growing consensus that organizations with good corporate governance practices have marginal incidences of fraud and corruption. In this paper I will discuss the link between corporate governance and prevention of fraud and corruption.

Table of Contents
Introduction………………………………….……………………………………………….1 Purpose and Methodology……………….…………………………………………………2 Organization of the study……………….………………………………….……………….2 Chapter 1: Corporate Governance Background…………………..……………….…….3 Chapter 2: Composition of the Board………..….…………………….…………….…….5 Chapter 3: The Role of the Board……..………….………………………………….……8 Chapter 4: Board Committees…………………..….……………………………….……10 Chapter 5: Corporate Governance and Fraud…..….…………………………….…….12 Conclusion……………………………………………..….………………………………..13 Appendix…………………………………………………….………………………….…..14

NEXUS BETWEEN CORPORATE GOVERNANCE AND THE PREVENTION OF FRAUD AND CORRUPTION IN THE WORK PLACE

CHAPTER ONE: INTRODUCTION

In this chapter, I will attempt to define what corporate governance is; then, I will identify the key players of corporate governance. The rest of the report will discuss how corporate governance can be used to prevent fraud and corruption.

Definition
The reader should know that there is no single definition for such a term as corporate governance. In simplest terms corporate governance means how corporations or companies are run. R.I. Tricker (1984) observed that if management is about running the business, governance is about seeing that it is run properly. The Cadbury committee defines Corporate Governance as the system by which companies are directed and controlled.

Corporate governance players
In running a company, we can say that there are three major players, namely shareholders, board of directors, and management. The success or failure of companies to a large extent depends on the actions of these three major players. The fight against fraud and corruption should be a collective effort by these three parties. While fulfilling their duties, the parties must operate within the guidelines of legal and regulatory framework including other agreed upon rules and procedures of the company. Consequently Government and other stakeholders are also interested parties. The board of directors is therefore not only accountable to shareholders but also to Government and other stakeholders.

The shareholder’s main role is to appoint and provide guidance to the directors. The directors set strategic direction while the management implements the strategic goals. Of the three major players, the directors play a pivotal role in ensuring effective corporate governance. It is for this reason that much discussion is dedicated to the composition, role, and function of the board of directors and its committees.

PURPOSE AND METHODOLOGY

This report has been commissioned as part of an academic study for the Executive MBA course in Corporate Governance. The methods used to collect data are through:- ➢ books
➢ internet
➢ published articles, magazines

ORGANIZATION OF THE STUDY

The study has 5 main chapters as follows:-
➢ Corporate Governance...
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