Monthly Archives: March 2014
The dynamic between boards and shareholders of the companies they represent is evolving at a fast pace. This dynamic is now presenting a new set of challenges and these require new tools and techniques in the boardroom. The relationship between boards and shareholders has had to be rethought with a view towards identifying the differences in shareholder and board member perspectives in a timely and appropriate manner.
Following the 2008 financial crisis, the landscape of corporate governance has undergone numerous substantial changes and this trend has been moving forward at an increasing pace over the last few years. As part of this discussion the evolution and establishment of director pay and remuneration policy have become particular issues of focus. Shareholders want more of a say and more disclosure when it comes to executive compensation.
The 2007-2008 financial crisis and the collapse of the large American investment bank Lehman Brothers led to widespread public, media and political outrage over large CEO pay packages at Wall Street firms which were subsequently bailed out by taxpayers. In response the US Congress passed the Dodd-Frank law.
New corporate governance practices are being rolled out across the globe and existing practices are being developed. In some countries and industries in the past, corporate governance standards have been perceived to be inadequate and weak. However, with the changes in regulations and standards over the last few years corporations are concerned that amended governance
There is an overall international consensus of opinion that greater protection is needed for the rights of minority shareholders. Regulators around the world have stepped up the controls for such protection, and are in the process of further increasing such controls.
Across the globe, the function of the audit committee is to provide recommendations, guidance and advice to the board of companies and organisations. Specific responsibilities and requirements for an audit committee can vary by country, however, the framework of the audit committee role is often influenced by economic and political factors and unionised groups who are capable of campaigning for and passing through evolved legislation.
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