The Board & Corporate Governance

Introduction

• Some Basic Principles
• What is the role of the board?
• What is corporate governance?
• The international perspective - divergence or convergence?
• US Sarbanes Oxley - act style legislation
• UK-style voluntary code
• The Senior Managers Regime
• Regulatory expectations

Corporate Governance

• Why does good corporate governance matter
• What does “good” look like
• Does good boardroom practice led to good performance
• The ‘corruption premium’ and the cost of accessing global capital
• Countering the vulnerability of short term capital flows
• Assessing governance in others
• Governance in banks - the agency problem; opaqueness, “rogue traders”
• The role of the bank in improving the governance of the corporate sector
• How poor governance can cause systemic financial crises

Legislative Framework

• Then the legal responsibilities of directors
• Listing requirements: how capital markets impose corporate governance requirements:
• Corporate governance codes;
• Recent regulatory trends in corporate governance
• How to develop a corporate governance code for your company
• Governance disclosures: governance as a competitive edges

The Role of the Board

• Principles of independence and leadership
• Building the right working relationship between Board and management
• The Board’s responsibilities for:
  • Management oversight
  • Protection of stakeholders’ rights
  • Disclosure and transparency
  • The company’s strategy
• Board Composition
• Independent and non-executive directors 
• New powers for non-executive directors, stiffer penalties for negligence 
• Rule of engagement: defining the non-executive director 
• How two-tier boards embed ‘independence’ – sometimes at a cost 
• Board meetings basics; information for directors

The Board in Practice

• What are committees for
• Rules and principles for committees.
• The role of the Audit Committee
• Other key committees
• Membership and expertise requirements; “financial literacy” requirements; processes and procedures
• Resources for Committee members
• Relationships with internal and external auditors
• Managing changes in membership
• Structuring internal oversight, reviewing internal controls
• Board nominations: whom to appoint to the board?
• Sourcing directors 
• Creating effective Board appraisals and assessments 
• How the board should manage succession planning 
• Setting pay and compensation in the company: basic principles 

Governance & Risk

• The oversight of risk
• Assigning responsibility in management 
• The role of Chief Risk Officer
• Reporting line practices 
• Modern systematic approaches to risk management
• Tools for the Board 
• Enterprise Risk Management  
• Extreme event management
• Case Study/Example

Dealing With Key Stakeholders

• Disclosure and financial reporting best practice’ 
• Investor relations: the practicalities for the board 
• Communicating governance inside and outside the company 
• Shareholders and their rights 
• Shareholder stewardship; communications between board and shareholders 
• Dealing with shareholder activism  
• Managing the annual shareholders’ meeting

Course Conclusion and Review / Feedback