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Corporate Governance Case Study

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by

Engy Hendawi

on 22 May 2014

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Transcript of Corporate Governance Case Study

The Board of Directors
Board of Directors
The Management Control Environment
-No formal documented
strategic planning.

-No clear forms of accountability
or clear organizational structure.
Routine meetings to review the
progress,are rarely conducted.

-No clear decision making
authorities defined in an authority
matrix .

-No committees clearly defined
with clear decision making
authorities.

The Management
Control Environment
Transparency & Shareholders Relations
Corporate Governance Case Study
SAFECO




-Chairman has singular authority for all decisions.
The board role isn't clearly defined.

-No training for directors to ensure he understand his duties and responsibilities.

-Safeco's board has no training or induction for corporate governance, and no action plan to improve it.
-Chairman should understand his role as a supervisor of the
board.

-Board should define authorities between board,committees,shareholders,and management.

-Include duties and responsibilities in board charter and director appointment letter.
CEO and chairman should discuss importance of corporate governance with managers and staff .
-Development a documented strategic planning and other plans for KPIs and clear accountability.

-Reviewing progress against the plans, setting up management committees and routine meetings.
Organizational structure must be clarified with reporting line showing authorities.

-Allowing for effective flow of information.
Creating executive committees.
-The board lacks diversity specially age diversity.

-They have an audit committee but It’s not efficient.
Mr,said puts the strategy himself instead of directing and proving strategies.

-The board doesn't oversee nor determine compensation policies .
no disclosure to shareholders .
-The board needs to have more diverse composition ,and Use board committee to facilitate objective process for identifying new potential nominees.

-They should have other committees in certain areas that should be independent or at least non executive.
They need to ensure that minutes are kept and actively use these to follow up on implementation of annual work plan .

-Requires the board to oversee and determine remuneration policies and practices .
-Decisions aren't communicated informal documents.
-No Management committee.
No identification for potential risk.
Info are not fully communicated to stakeholders.
-The internal audit is not mentioned if he coordinates with external audit , compliance , risk functions as needed.
- Is not fully independent and capable of delivering unbiased audit service.
-Formal internal communication means & periodical meetings
with top executives .
-Risk management & internal control should be given a high priority.
-Give advice to the business to improve risk management .
Ensure the independence of the auditor.
- Ensure the independence of the auditor
- Consider rotation of external auditor .

-No annual report.
no website for itself as a parent company.

-No special rights for stakeholders.
no protection for minority.

- Three days in advance to publish the agenda.

-Other problems related to responsibilities & dividend.
- Disclosure laws and regulations.
-Shareholder information: timely, accurate and insightful.
-Conduct ethics.
-Ensure that directors not influence voting.
-Dividends policy.
-Minority participation on the board.
-AGM documentation timely
Remedies
Problems
Problems
Remedies
Problems
Remedies
Problems
Remedies
Problems
Remedies
Full transcript