Govenance,Reporting and Ethics Essay Example | Topics and Well Written Essays - 1500 words

Govenance,Reporting and Ethics - Essay Example However, a company should not pay more than required for this case but the remunerations should commensurate with individual performance (Bebchuk & Roe, 1999). The committee for remuneration should also judge where to place their Company in relation to other companies. However, these comparisons should be made wisely such that remuneration levels correspond with performance improvement. According to the Combined Code address on accountability and auditing, the company's board should be able to show a balanced as well as an assessment that can be understood in order to determine the position and prospects of the company. This can simply be termed as financial reporting. The code provides that the directors in an annual report should explain their responsibility of Code Provisions The directors should explain in the annual report their responsibilities for account preparation and there should also be auditor's statements concerning their reporting responsibilities. The main roles and responsibilities of the committee for auditing include: It also recommends that, all directors including the non-executive directors should be re-elected at regular intervals by the shareholders. This contributes to continued improved and satisfactory performance. Th The code requires that a company should produce disclosure statements and also report on how they apply the principle of management and governance (La Porta et al. 2000). Companies should be free to explain the governance policies that they as well as any circumstances that have led them to employing a particular approach. The company has also to confirm that it adheres to the provisions of the Combined Code and if it does not, then it is liable to giving an explanation as to why it cannot comply. This is referred to as "comply or explain" approach and has been in existence for long whereby it is widely accepted by the investors as well as company boards. The people who are concerned with governance evaluation should do this with an aim of promoting partnership as well as trust in the company. They should consider company's nature of risks as well as the challenges that it faces. They should also consider the size as well as the complexity of the company. ISSUE 1. Non-executive directors and Independence. Non-executive directors play a very key role and are believed to be very effective in the building of good corporate governance structures. The chairman has the capability of holding meetings with non-executive directors even in the absence of executives. The non-executive directors also meet annually under the leadership of the senior independent director but in the absence of the chairman to give an appraisal on the performance of the chairman.The non-executive directors are usually provided with professional advice at the expense of the company whereby they consider it important to discharge