Corporate Governance

This publication defines and explains key MFI corporate governance terms. Terms covered in the list include board committees, control / controlling shareholders/changes of control, code of ethics, conflict of interest, corporate governance, corporate governance code, cumulative voting, directors, director and board evaluation, independent director, internal auditing, internal controls, non-financial disclosure, recognized independent auditing firm, related parties, and regulatory compliance. Key points include:

• Board committees allow a subset of directors with appropriate skills to spend additional time on their assigned subject matter;
• Control refers to the ability of an individual, a group or a legal entity to predetermine a companys decisions, its oversight and its management bodies;
• Code of ethics is a guide of behavior and values that imposes duties and responsibilities on a firms directors, managers, and employees towards its stakeholders;
• Corporate governance refers to the structures and processes for the direction and control of companies;
• Corporate governance code of a company is a document developed and approved by the board of directors which stipulates the company’s various governance policies;
• Internal auditing measures the effectiveness of other controls.