Page 125 - F1 Integrated Workbook STUDENT 2018

Corporate governance

Corporate governance in action

Corporate governance can either be rules based i.e. legal, or principles based i.e.
guidance.

Corporate guidance generally incorporates the following.

5.1 Segregation of Roles

Best practice recommends that the roles of chairman and Chief Executive Officer
should be held by different people to reduce the power of prominent board members.

5.2 Committees

The committees act as a control mechanism by having specialists to coordinate
internal and external auditors, deal with remuneration, risk and nominations.

5.3 Internal audit

Internal audit is the control of all controls.

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