Internal Audit

2. CORPORATE GOVERNANCE

3. DEFINITION
Governance Process—The procedures utilised by the representatives of the
organisation’s stakeholders (e.g., shareholders, etc.) to provide oversight of risk
and control processes administered by management.

4. PRINCIPLES
The principles are based on a philosophy that codes should be concise,
understandable and accessible.
The aim being to help improve legal, institutional and regulatory framework as
guidance to stock exchanges, corporations and investors. They see corporate
governance as a set of relationships for company management, the board,
Shareholders and stakeholders and setting objectives and monitoring performance
in the context of the separation of ownership and control.

5. FIVE KEY PRINCIPLES
1. Rights of shareholders. CG framework should protect shareholders’ rights.
2. The equitable treatment of shareholders. CG framework should ensure the equitable
treatment of all shareholders, including minority and foreign shareholders.
3. The role of stakeholders in corporate governance. CG framework should ensure that
timely and accurate disclosure is made of all material matters regarding the corporation,
including the financial situation, performance, ownership and governance of the
company.

6. FIVE KEY PRINCIPLES
4. Disclosure and transparency. CG framework should ensure that timely and accurate
disclosure is made on all material matters regarding the corporation, including the
financial situation, performance, ownership and governance of the company—includes
financial and operational results, company objectives, share ownership and voting,
board membership and remuneration, material foreseeable risk factors, governance
structures and policies and annual audit and access to information by users.

7. FIVE KEY PRINCIPLES
5. Responsibility of the board. CG framework should ensure the strategic
guidance of the company, the effective monitoring of management by the
board, the board’s accountability to the company and the shareholders. The
board should be fully informed, fairly treat shareholders, ensure compliance
with laws etc., review performance and risk policy etc. also ensuring that
appropriate systems of internal control are in place, in particular, systems for
monitoring risk, financial control and compliance with the law and disclosure
and communications. Board should consider using NEDs and have access to
accurate, relevant and timely information (and access to key managers such as
company secretary, and the internal auditor and recourse to independent
external advice).

8. SEVEN CHARACTERISTICS OF CORPORATE GOVERNANCE
1. Discipline—correct and proper behaviour.
2. Transparency—true picture of what is happening.
3. Independence—no undue influences.
4. Accountability—actions of the board may be assessed.
5. Responsibility—to all stakeholders.
6. Fairness—rights of various groups respected.
7. Social responsibility—good corporate citizen.