BACC 131 M5

• Human Resource Management


  The process of attracting, training, developing, and maintaining an excellent workforce
• Corporate Governance


  • Ensures the adequate and appropriate system of controls operate within a company and hence assets may be safeguarded
• Good Governance ensures that the company is managed in the best interest of all stakeholders
• Civil engineering management


  Integrates principles of engineering, business, and management to optimize complex systems and processes within industrial settings
• Finance


  The function of management concerned with the procurement and utilization of funds for the organization's operations
• Corporate governance


  The system of directing and controlling companies, ensuring transparency and reducing corruption
• Cadbury Code (1992)


  Guidelines or recommendations on corporate governance that were specified by the UK's Cadbury Committee, with the aim of raising the standards of corporate governance as well as financial reporting and auditing in organizations
• OECD Principles (1999)


  The Organization for Economic Cooperation and Development's principles to achieve the highest sustainable economic growth and employment and a rising standard of living in Member countries, while maintaining financial stability
• World Bank/IMF


  The World Bank was established in 1944 to help rebuild Europe and Japan after World War II
• Global Corporate Governance Network

  The system of decision-making and cooperation among international actors, including states, intergovernmental organizations, non-governmental organizations, and civil society
• International Corporate Governance Network (1999)

  A not-for-profit body, based in London, that was founded in 1995 in Washington DC, stemming from the corporate governance initiatives in North America and Europe in the mid 1980s
• Commonwealth Association for Corporate Governance (CACG)


  Emphasizes key principles for effective corporate governance, including transparency, accountability, fairness, responsibility, stewardship, and ethical behavior
• EU Company Law Experts

  Contribute to the development of company law initiatives and provide insights into corporate governance, covering formation, capital, disclosure requirements, and company operations
• Basel Committee (1999)


  Established in 1974 to improve global banking supervision and promote cooperation among member countries, setting international standards for bank regulation
• US Corporate Governance


  A set of rules that governs the management and operations of publicly traded companies in the United States
• Basel Committee on Banking Supervision


  Established in 1974 to improve global banking supervision and promote cooperation among member countries. Aims to close gaps in international supervisory coverage and ensure consistent supervision across member jurisdictions.
• Basel Committee standards


  1. Basel I (1988): Introduced minimum capital requirements based on credit risk exposure.

  2. Basel II (2004): Enhanced risk sensitivity by considering credit, market, and operational risks.

  3. Basel III (ongoing): Responded to the 2007-09 financial crisis by strengthening capital and liquidity requirements
• US Corporate Governance Code (USCGC)

  A set of rules that governs the structure and operation of publicly traded companies. It outlines fiduciary and managerial responsibilities, binding management, shareholders, and the board within a broader societal context.
• Key aspects of USCGC

  • Management's fiduciary duty to act in the best interests of shareholders
  • Directors' duty to align strategic decisions with long-term value creation
  • Shareholders' rights and responsibilities
  • Legal and regulatory forces
  • Ethical considerations guiding behavior
• Sarbanes-Oxley Act (SOX)


  A US federal law aimed at improving corporate governance and financial reporting. It addresses issues like accounting transparency, auditor independence, and internal controls. The law also provides job protection for whistleblowers.
• SOX was enacted in response to corporate fraud scandals like Enron and Tyco
• Business Sector Advisory Group (BSAG)

  Tasked by the OECD to provide insights and recommendations on corporate governance practices. Members hailed from different countries and brought diverse expertise.
• Notable BSAG members


  • Ira Millstein (USA): Prominent legal expert and corporate governance advocate
  • Adrian Cadbury (UK): Known for the "Cadbury Report" on corporate governance
  • Michel Albert (France): Respected economist and thinker on business and society
  • Dieter Feddersen (Germany): Expert in corporate law and governance
  • Isikko Takkei (Japan): Contributed insights from the Japanese perspective
• Difficulty of convergence of CG principles

  • Different countries and stakeholders may have varied goals for CG
  • Countries have diverse objectives and priorities when it comes to corporate governance, such as shareholder wealth maximization versus stakeholder interests, complicating consensus on principles
• International Variety of Circumstances

  • Economic and political differences across countries create diverse contexts for CG implementation, affecting how principles are perceived and applied
• International Variety of Corporate Forms

  • Legal structures and corporate governance norms vary globally, influencing how principles like board structures or shareholder rights are interpreted and implemented
• International Variety of History and Traditions


  • Long-standing practices and cultural norms shape corporate governance frameworks, leading to resistance or slow adaptation to new principles
• Involvement of Vested Interests

  • Powerful stakeholders, such as entrenched management or influential shareholders, may resist changes that could diminish their influence or control within corporations
• Resistance to Change


  • Established practices and interests may resist adopting new CG principles, fearing disruption or loss of control over decision-making processes
• The US Corporate Governance includes an objective to facilitate the development of appropriate institutions
• Corporate governance principles must accommodate different types of corporate structures
• The OECD Principle is maintaining financial stability, and thus to contribute to the development of the world economy