Write 8 page essay on the topic Questions in a case study in theCorporate Governance & Social Responsibility field.
None among the management should have the ultimate power during the decision-making process (FRC, 2003)
This is because when this happens, the company will have a chairman who will be the leader to the board making sure it is effective in its roles and sets the board’s agenda. He will make sure the directors have accurate, clear and timely information.
Since no governance structure exists, this principle will help to promote efficient and transparent markets, ensuring the consistency with the law and articulating clearly separation of responsibility among the management. This must be achieved by:
Consistent, enforceable and transparent regulatory and legal requirements affecting governance should be provided. The framework should be developed to generally impact integrity of market, economic performance and promote participation (OECD, 2004).
According to OECD (2004), the corporate governance is expected to safeguard and facilitate the expression of shareholders’ rights and so by applying this principle, the extractive industry will be aiming to put in place structures in order to achieve the following:
Firstly, it gives the shareholders their basic rights which include but not limited to. obtaining a means of ownership by registration, be able to transfer shares, be able to obtain information regarding the corporate regularly and on time, obtain participation and voting regularly on AGMs, having a say in electing and voting office bearers serving on the board and finally be able to share the profits of the corporate.
Secondly, it ensures that shareholders have the rights for participation and information on key decisions affecting the corporate which could include. proposals to amend the statutes, incorporation articles or any other relevant administration documents of the company, proposals to authorize additional shares and in any decisions to undertake significantly extra ordinary transactions (OECD, 2004).
Thirdly, it gives shareholders