General

7 Key Corporate Governance Concepts for ACCA P1

There are a few key concepts underpinning good corporate governance in an organisation. Here are a few of them you should know for your ACCA P1 studies.

1. Fairness
The board of directors should treat all stakeholders fairly and equitably.

2. Independence
Each director should independent. There should be no conflict of interest. For example, it would not be good for a director to get involved in the sale of an asset to another company, if he/she was a director of that other company too.

3. Honesty
The directors must protect the shareholders interests in the organisation, and should give confidence to the shareholders that thier interests are being protected.

4. Transparency
The directors should disclose material information in a timely and accurate manner.

5. Accountability
Those who control the business (i.e. directors) should be accountable to those who own the business (i.e. shareholders)

6. Integrity
Moral and ethical issues should be considered when making decisions relevant to the organisation.

7. Responsibility
The board of directors should ensure the organisation complies with the relevant laws where it operates.

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