What is Corporate Governance: Understanding the Process

Section

Topic Area

Exemplification

A: Corporate Governance – Principles and Issues

Definitions and Issues in Corporate Governance

• Origins and definitions of corporate governance
• Theories of corporate governance
• Shareholder primacy theory
• Agency theory
• Agency conflict
• Agency costs
• Stakeholder theory
• Approaches to corporate governance
• Shareholder value approach
• Stakeholder approach
• Inclusive stakeholder approach
• Enlightened shareholder value approach
• Principles of corporate governance
• Responsibility
• Accountability
• Transparency
• Independence
• Participation
• The corporate governance framework
• Applicable laws, regulations, standards and codes
• Rules-based approach
• Principles-based approach
• Hybrid approach
• Concepts of comply or explain
• Implementation of a governance framework
• Organization purpose
• Assimilation of governance practices
• Organizational success
• The importance of adopting good governance practices
• Consequences of weak governance
• Key issues in corporate governance
• Composition of boards
• Financial reporting
• Stakeholder relation
• Social responsibility and sustainability
• Compensation of directors and senior executives
• Shareholder and member engagement
• Performance of directors
• Risk management
• Technology and information governance

History of Corporate Governance in Canada

• Background\
• The Dey Report
• The Kirby Report
• The Saucier Reports
• National Policy 58-201 & National Instrument 58-101
• Other Financial Disclosure Rules
• Future Directions

Governance in other countries and other sectors

• Governance in US - SOX & Dodd-Frank5
• Governance in UK – Cadbury to 2018
• Governance Code
• Governance in Germany, Japan, China
• Global principles of corporate governance
• Governance issues in developing and emerging markets
• Governance in other sectors
• Financial institutions
• Public sector
• Not-for-profit sector 
• Governance for family-controlled companies

Role of the Company Secretary/ Governance Professional in Corporate Governance

• The corporate secretary and corporate governance
• The requirements for a corporate secretary
• The role of the corporate secretary
• The corporate secretary as the ‘conscience of the company'
• The Corporate Secretary: Building trust through governance
• Qualifications and skills
• Position in the organisation
• Independence of the corporate secretary
• Liability of the corporate secretary
• Inhouse v. outsource corporate secretary

B: The Board of Directors and Leadership

Directors’ Duties and Powers

• Powers of directors
• General duties of directors under the CBCA
• Duty to act within powers and for proper purposes
• Duty to promote the success of the company
• Duty to exercise independent judgement
• Duty to exercise reasonable skill, care and diligence
• Duty to avoid conflicts of interest
• Duty not to accept benefits from third parties
• Duty to declare interests in transactions
• Who can bring an action for a breach of the general duties
• Fraudulent and wrongful trading
• Directors’ and officers’ insurance

Role and Membership of the Board

• Role of the board
• Matters reserved for the board
• Role of the chair
• Role of the chief executive officer
• Separation of the roles of chair and chief executive
• Non-executive directors – role and independence
• Non-executive directors – effectiveness
• Senior independent director
• Board committees and NED
• Role of the Corporate Secretary

Board Composition and Succession Planning

• Board size
• Balance of skills, knowledge and experience
• Diversity
• Nomination committee
• Appointments to the board
• Accepting an offer of appointment
• Succession planning
• Refreshing board membership
• Annual Re-election

Board Effectiveness

• Decision-making processes
• Supply of information
• Board portals and electronic board papers
• Use of social media by boards
• Corporate culture
• Independent professional advice
• Performance evaluation
• On boarding and Professional Development

C: Disclosure

Financial Reporting to Shareholders and the External Audit

• Financial reporting
• Requirements for financial reporting
• Investor confidence in financial reporting
• The role of the board in financial reporting
• Role of the corporate secretary in financial reporting
• Audit committee requirements
• Role and responsibility of the audit committee
• Meetings of the audit committee
• Audit committee relationship with the board
• Audit committee relationship with shareholders
• Audit committee report
• Role of the corporate secretary in relation to the audit committee
• External auditor
• Role of the external auditor
• Auditor independence
• Non-audit services
• Auditor rotation
• Role of the corporate secretary in relation to the external auditors

Corporate Social Responsibility, Sustainability and Business Ethics

• Definition of corporate social responsibility (CSR)
• History of CSR
• The business case for CSR
• Categories of CSR activity
• CSR frameworks
• Integrated thinking
• Advising the board on being socially responsible
• Sustainability
• Advising the board on planning for sustainability
• Business ethics
• The role of the corporate secretary in building an ethical culture
• Difference between business ethics, corporate responsibility and sustainability

CSR and Sustainability Reporting on non-financial issues

• CSR reporting and the law
• Drivers for voluntary CSR reporting
• Measuring CSR initiatives
• Triple bottom line reporting
• Integrated reporting
• Global Reporting Initiative
• Sustainability Accounting Standards Board
• IIRC integrated reporting framework
• Corporate Reporting Dialogue
• CSR benchmarking
• External assurance
• Environmental Profit & Loss Accounts
• The corporate secretary’s role in CSR reporting

D: Risk Management and Internal Control

Risk Management and Internal Control Systems

• The Nature of Risk
• Internal Control System
• The Canadian Corporate Governance Framework
• The Turnbull Committee Report on Internal Control
• The Role of Internal Audit
• Risk Management
• The Role of the Board (or Audit Committee) in Risk Management and internal controls
• Risk Management Committees
• Common failures of boards

Risk structures, policies, procedures and compliance

• Governance structures and players
• Policies and procedures
• Whistleblowing
• Cybersecurity
• Information Governance
• Disaster recovery plans
• The Corruption of Foreign Public Officials Act
• Conflict prevention and resolution
• Senior Executive Compensation and Risk

E: Corporate Governance Systems, Controls and Issues

Shareholders’ and Members’ Rights and Engagement

• Definitions
• Separation of Ownership and Control
• The relationship between the board and shareholders
• Shareholder Rights
• Common abuse of shareholder rights
• Shareholder expectations
• Institutional shareholder responsibilities
• Proxy Advisor Influence
• Responsible Investment v. socially responsible investment
• Member Rights in the NFP world

Board Engagement with Shareholders and other Stakeholders

• Shareholder engagement
• Annual general meetings
• Electronic communication
• Engagement with other stakeholders
• CBCA requirements to consider other stakeholders
• The role of the Governance Professional in Stakeholder Engagement

Compensation of Directors and Senior Executives

• Compensation as a corporate governance issue
• Elements of compensation for executive directors and senior executives
• CCGG Principles on compensation
• Compensation committee
• Compensation Disclosures for public companies
• Directors’ compensation policy
• Compensation for loss of office and rewards for failure
• Listing Rule provisions on long-term incentive schemes