Governance

The terms

• Accountability

  Accountability is the obligation to answer for decisions, actions and results, and to accept consequences, to a person or body with the right to ask. It cannot be fully handed to someone else.

  Subdomain: Corporate Governance

• Agency Problem

  The agency problem arises when one party, the agent, acts for another, the principal, but has different interests and more information. In companies, managers may pursue their own goals rather than shareholders' interests.

  Subdomain: Corporate Governance

• Annual General Meeting (AGM)

  An annual general meeting is the yearly meeting where shareholders receive the accounts, vote on matters such as electing directors, appointing the auditor and pay policy, and question the board.

  Subdomain: Corporate Governance

• Audit Finding

  An audit finding is a point in an audit report where the auditor records that practice fell short of what was expected, backed by evidence, a cause, the resulting risk and a rating.

  Subdomain: Internal Control and Audit

• Audit Plan

  An audit plan is a document setting out which areas the internal audit function will review over a period, usually a year, when, with what resources and why, based on an assessment of risk.

  Subdomain: Internal Control and Audit

• Board Committees

  Board committees are smaller groups of directors, appointed by the full board, that study specific areas such as audit, risk, pay or appointments and report back with findings or recommendations.

  Subdomain: Board and Committees

• Business Ethics

  Business ethics is the set of moral principles guiding how an organisation and its people make decisions and treat customers, staff, suppliers, competitors and society, including where the law is silent.

  Subdomain: Ethics and Conduct

• Chair of the Board

  The chair of the board leads the board, sets its agenda, runs its meetings and makes sure directors get the information and time they need to decide well. The role is separate from running the business.

  Subdomain: Board and Committees

• Code of Conduct

  A code of conduct is a written set of rules telling staff and others who work for an organisation what behaviour is expected and prohibited, and what follows if the rules are broken.

  Subdomain: Ethics and Conduct

• Code of Ethics

  A code of ethics is a document stating the values and principles an organisation or profession commits to, such as honesty, fairness and respect, to guide decisions where no specific rule applies.

  Subdomain: Ethics and Conduct

• Conflict of Interest

  A conflict of interest arises when someone's personal interests, relationships or duties to another party could affect, or appear to affect, how they carry out their duties for their organisation or client.

  Subdomain: Ethics and Conduct

• Corporate Governance Code

  A corporate governance code is a set of recommended board and company practices, issued by a regulator, exchange or professional body, usually applied on a comply or explain basis.

  Subdomain: Corporate Governance

• Declaration of Interests Register

  A declaration of interests register is a record in which directors, officials or staff list their financial interests, outside roles and relationships that could conflict with their duties, kept current and open to review.

  Subdomain: Ethics and Conduct

• Ethics Committee

  An ethics committee is a group, usually at board or senior management level, that oversees an organisation's ethical standards, reviews difficult cases and monitors how well its code of ethics is followed.

  Subdomain: Ethics and Conduct

• Ethics Hotline

  An ethics hotline is a confidential channel, by phone, web form or app, through which employees and others can report suspected misconduct or ask for guidance, often anonymously and often run by an outside provider.

  Subdomain: Ethics and Conduct

• Ethics Officer

  An ethics officer is a senior person responsible for promoting ethical conduct inside an organisation, advising staff on dilemmas, running training and handling reports of breaches of its code of ethics.

  Subdomain: Ethics and Conduct

• Executive Compensation

  Executive compensation is the total pay of a company's senior leaders, made up of salary, bonuses, share awards, pensions and benefits, designed to attract talent and link rewards to performance and risk.

  Subdomain: Corporate Governance

• Governance, Risk and Compliance (GRC)

  Governance, risk and compliance is the joined-up management of how an organisation is directed, how it handles risk and how it meets laws, rules and its own policies, using shared processes and information.

  Subdomain: Corporate Governance

• Integrity

  Integrity is the quality of acting in an honest way and consistently with stated values and rules, including when nobody is watching or when doing otherwise would be easier or more profitable.

  Subdomain: Ethics and Conduct

• Minority Shareholder Protection

  Minority shareholder protection covers the laws and practices that stop controlling shareholders and managers from using their power to take value from smaller investors or treat them unfairly.

  Subdomain: Corporate Governance

• Misconduct

  Misconduct is behaviour by a member of an organisation or profession that breaks its rules, the law or accepted standards, such as fraud, harassment, falsifying records or abuse of position.

  Subdomain: Ethics and Conduct

• Nomination and Remuneration Committee (NRC)

  The nomination and remuneration committee is a board committee that proposes who joins and leaves the board and senior management and recommends how directors and executives are paid. Some firms split it into two.

  Subdomain: Board and Committees

• Non-Executive Director (NED)

  A non-executive director sits on the board but does not work in the company's management. The role is to challenge executives, oversee performance and risk, and bring outside experience.

  Subdomain: Board and Committees

• Organisational Culture

  Organisational culture is the shared set of values, beliefs, habits and unwritten rules that shape how people in an organisation behave and decide, especially when nobody is checking.

  Subdomain: Ethics and Conduct

• Policy Framework

  A policy framework is the organised structure of an organisation's policies, standards and procedures, with defined owners, approval routes and review cycles, so rules are consistent, findable and kept up to date.

  Subdomain: Internal Control and Audit

• Public Accountability

  Public accountability is the duty of governments, public bodies and those who handle public money or power to explain and justify their decisions and results to citizens, and to face consequences if they fall short.

  Subdomain: Public-Sector and Institutional Governance

• Segregation of Duties (SoD)

  Segregation of duties is the control principle of splitting the steps of a process among different people, so that no single person can both carry out and conceal an error or fraud.

  Subdomain: Internal Control and Audit

• Succession Planning

  Succession planning is the process by which a board prepares for planned and sudden changes in its top leadership, by identifying and developing candidates and having an emergency plan for abrupt departures.

  Subdomain: Board and Committees

• Transparency

  Transparency is the practice of making decisions, rules, performance and risks visible to people with a legitimate interest, so they can understand and question what an organisation or public body does.

  Subdomain: Corporate Governance

• Whistleblower Mechanism

  A whistleblower mechanism is the set of channels and procedures an organisation sets up so that staff and others can report suspected wrongdoing confidentially, have it assessed and investigated, and receive protection.

  Subdomain: Ethics and Conduct

• Whistleblower Policy

  A whistleblower policy is a written document that tells people how to report suspected wrongdoing, how reports are handled and investigated, and what protection reporters can expect.

  Subdomain: Ethics and Conduct

• Whistleblower Protection

  Whistleblower protection is the set of legal and organisational safeguards that shield people who report wrongdoing from retaliation, such as dismissal, demotion or harassment, and keep their identity confidential where possible.

  Subdomain: Ethics and Conduct