Corporate Governance Examination Guidelines Session 2 – 2016

Question 1: Covers the topic area of the audit committee. You are required to write a report for submission to the Board of Directors that critically assesses  the structure and operations of the audit committee as a corporate governance mechanism.

Question 2: Covers the topic area of corporate strategy setting.  You are required to write a report analysing the role of corporate governance in setting and implementing corporate strategies and the impact of corporate governance practices on an organisation's capacity to be innovative, competitive and creative for submission to the Australian Institute of Company Directors.

Question 3: Covers the topic area of ethical standards and business practice and the development of a corporate code of ethics.  You are required to write a report to be submitted to the Board of Directors that analyses the benefits of adopting a corporate code of ethics and provide examples of why a code of ethics is useful for good corporate governance.  

Question 4: Covers the topic area of corporate governance practices in growth SMEs.  You are required to write a report for submission to a Venture Capital Fund that identifies best corporate governance practices for growth SMEs in their transition to Initial Public Offering.

Question 5: Covers the topic area of international corporate governance and the range corporate governance practices around the world.  You are required to write a report for the Organization for Economic Cooperation and Development (OECD) critically assessing the Anglo-American shareholder orientation of corporate governance.

Question 6: Covers the topic area of corporate social responsibility.  You are required to write a report for the Board of Directors that analyses the benefits and costs of corporate social responsibility reporting and critically assesses how corporate social responsibility is aligned with good corporate governance practices. 

EXECUTIVE SUMMARY

This report investigates the area of corporate governance and its relationship with the structure and operations of an audit committee. The content of the third edition of Corporate Governance Principles and Recommendations as issued by the ASX Corporate Governance Council has been analysed in details to identify the role of an audit committee in the corporate governance system. The report recommends that an audit committee plays a key role in assisting the board in fulfilling its corporate governance in relation to a company’s financial reporting, internal control system, risk management systems and the internal and external audit functions.  

INTRODUCTION

The principle of corporate governance is as old as good behaviour. Corporate governance is a broad range term which, amongst other things, encompasses the rules, relationships, policies, systems and processes whereby authority within the organisation is exercised and maintained. (Australian Institute of Company Directors, 2016)

Sir Adrian Cadbury Committee defined Corporate Governance “as the system by which the companies are directed and controlled. The basic objective of corporate governance is to enhance and maximise shareholder value and protect the interest of other stakeholders”.

According to World Bank, Corporate Governance is Blend of law, regulation and appropriate voluntary private-sector practices,

1. which enables the corporation to attract financial and human capital to perform efficiently and
2. prepare itself by generating long term economic value for its shareholders while respecting the interests of stakeholders and society as a whole. 

The auditor does not have direct corporate governance responsibility but rather provides a check on the information aspects of the governance system.