- 5 Marks
Question
Prestige’s Board acknowledges that by adopting and implementing the highest standards of
corporate governance, this sets the standards and values for the entire Company. The
Company seeks to comply with best practice in all areas of corporate governance and
continues to review the Company’s procedures to maintain proper control and
accountability.
Required
Describe and explain how Principles V and VI of the OECD Principles of Corporate Governance – 2015 Edition, could be applied at Prestige to ensure good corporate governance practices.
Answer
- Principle V – Disclosure and Transparency:
- This principle emphasizes the importance of full and accurate disclosure of all material matters related to the company, including financial statements, ownership, and governance structures. At Prestige, applying this principle would involve ensuring that financial reports are transparent, timely, and comply with relevant regulations. Prestige would need to disclose key information such as conflicts of interest, related-party transactions, and executive compensation. Proper application of this principle would build trust among stakeholders and provide them with the information necessary to assess the company’s performance and governance.
- Principle VI – Responsibilities of the Board:
- Principle VI highlights the need for the board to be accountable to the company and its shareholders and to act in the best interests of the company. At Prestige, this would involve the board taking responsibility for overseeing the company’s strategic direction, risk management, and overall governance framework. The board must act with due diligence, ensuring that it has appropriate internal controls and that all directors, both executive and non-executive, are held accountable for their actions. The board should also foster an ethical corporate culture and ensure that the company complies with both local and international legal and regulatory requirements.
- Tags: Accountability, Corporate Governance, OECD principles, Transparency
- Level: Level 3
- Topic: Strategy, stakeholders, and mission
- Series: MAR 2024
- Uploader: Theophilus