Английский язык. Практический курс для решения бизнес-задач
Шрифт:
Одни только пенсионные фонды Америки потеряли на своих инвестициях в «Энрон» полтора миллиарда долларов. Сгорели пенсии государственных служащих, учителей, полицейских и пожарных.
Трюки такого масштаба, само собой разумеется, невозможны без сговора с аудиторами. Они и сговорились. После того как власти призвали к ответу обслуживавшую «Энрон» компанию «Артур Андерсен» – одну из пяти крупнейших аудиторских фирм США, – она уволила главу своего хьюстонского офиса Дэвида Данкена, отвечавшего за аудит корпорации-банкрота. У «Андерсена» затребовали документацию, касающуюся «Энрона». В ответ «Андерсен» сообщил, что, к великому сожалению,
Источник: Еженедельный журнал, 1.2.2002
Lesson 15
Corporate Governance
Read and translate the text and learn terms from the Essential Vocabulary
Corporate governance
Corporate governance is the set of processes, policies, laws and institutions affecting the way a corporation is directed or controlled. Corporate governance also includes the relationships among the stakeholders and the goals for which the corporation is governed.
Corporate governance is a multi-faceted subject. An important part of corporate governance deals with accountability, fiduciary duty and mechanisms of auditing and control. Thus, corporate governance players should comply with codes to the overall good of all constituents. Another important focus is economic efficiency, both within the corporation (such as the best practice guidelines) and externally.
Recently there has been considerable interest in the corporate governance practices of corporations, particularly since the high-profile collapse of Enron. Also, during the Asian financial crisis, a lot of the attention fell into the corporate governance systems of the developing world.
The corporate governance structure spells out the rules and procedures for making decisions on corporate affairs. It also provides the mechanisms through which the company objectives are set, as well as the means of attaining and monitoring the achievement of those objectives.
As a result of the separation of stakeholder influence from control in modern organizations, a system of corporate governance controls is implemented on behalf of stakeholders to reduce agency costs and information asymmetry. Corporate governance is used to monitor whether outcomes are in accordance with plans; and to motivate the organization to be more fully informed in order to maintain or alter organizational activity. Primarily, corporate governance is the mechanism by which individuals are motivated to align their actual behaviors with the overall corporate good.
Parties to corporate governance
Parties involved in corporate governance include the governing or regulatory body (e.g. the U.S. Securities and Exchange Commission), the CEO, the BoD, management, shareholders and other stakeholders.
All parties to corporate governance have an interest in the effective performance of the organization. Directors, workers and management receive salaries, benefits and reputation; whilst shareholders receive capital return. Customers receive goods and services; suppliers receive compensation for their goods or services. In return these individuals provide value in the form of natural, human, social and other capital.
A key factor in an individual’s decision to participate in an organization (e.g. through providing capital or expertise or labor) is trust that they will receive a fair share of the organizational returns. If some parties receive more than their fair return (e.g. exorbitant executive remuneration), then participants may choose to not continue participating (e.g. shareholders withdrawing their capital). Corporate governance is the key mechanism through which this trust is maintained across all stakeholders.
Principles
Key elements of good corporate governance principles include honesty, trust and integrity, openness, performance orientation, responsibility and accountability, mutual respect, and commitment to the organization. In particular, senior executives should conduct themselves honestly and ethically, especially concerning actual or apparent conflicts of interest, and disclosure in financial reports.
Commonly accepted principles of corporate governance include:
– Rights of, and equitable treatment of, shareholders.
– Interests of other stakeholders.
– Role and responsibilities of the board.
– Integrity and ethical behavior.
– Disclosure and transparency.
Mechanisms and controls
Corporate governance mechanisms and controls are designed to reduce the inefficiencies that arise from moral hazard and adverse selection. For example, to monitor managers’ behavior, an independent auditor attests the accuracy of information provided by management to investors.
Internal corporate governance controls
Internal corporate governance controls monitor activities and then take corrective action to accomplish organizational goals. Examples include:
– Monitoring by the board of directors: The BoD, with its legal authority to hire, fire and compensate top management, safeguards invested capital. Regular board meetings allow potential problems to be identified, discussed and avoided. Whilst non-executive directors are thought to be more independent, they may not always result in more effective corporate governance. Executive directors possess superior knowledge of the decision-making process and therefore evaluate top management on the basis of the quality of its decisions that lead to financial outcomes, ex ante.
– Remuneration: Performance-based remuneration is designed to relate some proportion of salary to individual performance. It may be in the form of cash or non-cash payments such as shares and share options, superannuation or other benefits. Such incentive schemes, however, are reactive in the sense that they provide no mechanism for preventing mistakes or opportunistic behavior.
– Audit committees.
External corporate governance controls
External corporate governance controls encompass the controls external stakeholders exercise over the organization:
– debt covenants;
– external auditors;
– government regulations.