Page 65 - SBL Integrated Workbook STUDENT 2018

Governance – general principles

Key concepts

The foundation to governance is the action of the individual. These
actions are guided by a person’s moral stance.

Characteristics which are important in the development of an
appropriate moral stance include the following:

 Fairness

– equality in dealing with internal stakeholders

– even-handedness in dealing with external stakeholders.

 Openness/transparency

– underlying principle of corporate governance

– transparency is required in the agency relationship

– default position of information provision rather than concealment.

 Innovation

– covers innovation and experimentation in reporting to the benefit of
investors and consumers.

 Scepticism

– an attitude which includes a questioning mind, being alert to conditions
which may indicate possible misstatement due to error or fraud.

 Independence

– the avoidance of being unduly influenced by a vested interest.

 Probity/honesty

– honesty in financial/positional reporting

– foundation ethical stance in both principles – and rules-based systems.

 Responsibility

– acceptance of liability for the outcome of governance decisions

– clarity in the definition of roles and responsibilities for action.

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