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Issue In Corporate Governance Essay

3641 words - 15 pages

*Corporate governance-an overview and comparative malaysian fram*e*work *with the *australian* framework Executive Summary This report documents overview of corporate governance and comparative Malaysian framework with the Australian framework. Corporate governance is not something new in today’s world. Good corporate governance is essential for entities that want access to capital. Corporate governance responsibilities rest with the board of directors, a number of corporate governance guidelines help to foster improved corporate governance practices. The guidelines foster awareness of a director’s responsibility and help communicate society’s expectations to the wider business ...view middle of the document...

There are many definitions, among them are: “Corporate governance” is generally defined as the system or process by which a company is directed and controlled in order to protect shareholders’ interests, in conformance to laws and regulations. “Corporate governance” refers to the processes and structure by which the business and affairs of the company are directed and managed. Its goal is to enhance long term shareholder value through improving corporate performance and accountability while taking into account the interest of other stakeholders. “Corporate governance”- is also as the relationship of a company to its shareholders or, as its relationship to society. “Corporate governance” is about promoting corporate fairness, transparency and accountability. The board is structured for a company to actually make decision. In the board there are directors, their skills and their background they should have. The company must have at least two directors according to the Companies Act 1965 whereas the companies listed on the Bursa Securities are required to have more than two directors with at least 1/3 are non-executive directors. To decide how many directors the company should have certain points should be considered. The size of the company The skills and background needed The skills and background would be desirable for participants to have. 2.2.2 Non-executive directors This describe as directors who are not in the full-time employment of the company. However he may have a major shareholding in the company and must show that he is truly independent as well in the context of listed companies. 2.2.3 Independent directors. This describes as directors who are not in the full-time employment of the company and has no other ties with the company including representing a major shareholder. They are directors solely for a fee and have expertise in the duties and responsibilities of directors. They are also an asset to a board. In accordance with case laws and practices, other than those statutorily stated in the Companies Act 1965, part of it, a director :- Must act in good faith for the interests of the company Must exercise a power for a proper purpose even he is in a good faith Must comply with the Companies Act 1965, other business-related legislation and the company’s constitution and so forth..... It is essential that a director has a working knowledge of the company’s activities; and devotes the time necessary to do the job in order for the general duties to be properly discharged. 2.4 LEGISLATIVE COMPLIANCE The Companies Act 1965 provides the legal framework for the Companies Commission to carry out its enforcement powers through the Registrar of Companies and the staff and the formation of different types of companies. This includes the regulating of shares, debentures and charges and also the management and administration of companies. Not to forget the...

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