There are a few key concepts underpinning good corporate governance in an organisation. Here are a few of them you should know.
Public Sector organisations are different to private organisations as there can be a number of different stakeholders involved. For example, they may report and be held accountable to senior civil servants, who run the organisation and oversee its goals. They may also be accountable to the politicians, who these civil servants report to. Ultimately, they are accountable to the electorate, who vote the politicians into office.
An agency relationship exists where a principal (the owner) or an organisation engages an agent (the manager) to perform duties on the principal’s behalf. For example, the shareholders delegate the running of a business to the directors. Here’s a quick overview if you’re studying Governance Risk and Ethics.
Corporate Governance represents the set of policies and procedures that determine how an organisation is directed, administered and controlled. Here are a few bits you might find useful for your ACCA P1 exam.
Objectives of Corporate Governance
- The codes and regulations provide a mechanism for successful business
- Corporate Governance codes and regulations help control executive directors of public companies
- They provide checks and alerts
Good corporate governance promotes the success of the business and encourages strategies that consider the interests of shareholders and other stakeholders. Here’s a few responsibilties which you might find useful for your ACCA P1 Governance Risk and Ethics studies.
Public sector governance is a new area to the ACCA P1 exam. From December 2014 onwards, candidates will be expected to be familiar with governance in a wider range of organisations, such as public sector organisations. Let’s take a look at some of the key areas of public sector governance.