Governance and financial crises

by **Rocky** Mon 30 Jan 2017, 2:26 am

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Post n°1

Governance and financial crises

by Rocky Mon 30 Jan 2017, 2:26 am

Governance and financial crises

1/30/2017 0:00

[rtl]Faris Al Salman *
The need for governance after the collapse of the economic and financial crisis experienced by Southeast Asia and Japan region in 1997 that called for controls to adjust the governance of all stakeholders in the companies. The increased importance because of the shift of many countries of the world to the capitalist economic systems.
The expansion projects implemented size led to ownership separation from the Directors and became a search for new sources of financing through borrowing from financial markets and coincided with the liberalization of financial markets moved money intercontinental warheads, and has expanded the size of corporate ownership and separation from the administration, led all of that to weak oversight mechanisms causing the exposure of companies to financial crises.
In the United States led the company scandal (Enron) , which emerged as a result of being too lenient with the external auditors , the Board of Directors and the lack of financial reports issued by the Directors accuracy, causing it to collapse. Prompting the US regulatory authorities to set rules (Serban - Oxley) in 2002 to adjust the work of public shareholding companies.
As well as the world is experiencing a deepening financial crisis, caused by the irrational policies that led to the loss and the loss of the rights of their owners, as well as investors ' loss of confidence in the economic and political structure of countries. Valley weak management and lack of oversight to the spread of financial and administrative corruption and accounting.
The logic of the market, highlights the following questions: What is the procedure that assures the investor or shareholder that the company which has invested his savings working for the high objectives, what ensures him that the financial reports issued by the company show the real financial situation of the company? What guarantees the lenders to the company that it will recover its loans? What guarantees the investor get a return on its investment in the company? But what guarantee him preserve his capital investor? What ensures the employee working in the company that this company will continue to produce value - added and how all stakeholders will get their rights?
The answer to all these questions is governance?
And controls the company 's formula represents one end real owner of the company (shareholder) the other side of the equation is the executive administration of any (agent) and because of the daily torrent of information available to the agent, because he runs the daily business of the company, tipped agent.
So the owner set the regulator to follow up the agent business called House of the administration, it is the duties of the board of directors oversight of the executive management as well as the duties of another we will address them.
And defined governance as actions based on the working principle of transparency, accountability and financial and administrative control within the company to ensure good performance and prevents the spread of corruption or prevent collapse in the case of group companies.
In other words , that means economic governance, legal, accounting, social and ethical dimensions used to protect the economic unity.
There are no known governance as governance systems group relations between the key players in the company 's controller (board members, executive management, shareholders etc ...) in order to achieve transparency, justice and the fight against corruption and the granting of the right of accountability of Directors to protect the interests of shareholders, and to make sure that the company It works to achieve its objectives and long - term Stratejyatea.
And know as the International Finance Corporation ( the system by which companies are managed and controlled in their work).
The Organization for Economic Cooperation and Development Vtarafha as ( a set of relationships between those in charge of the company 's management and board of directors and shareholders and other stakeholders).
International organizations have developed a framework for corporate governance include precise and timely disclosure of financial information and operational performance, spending and other aspects relating to the Council of the unit management or the President of the unit.
It includes the concept of governance to provide an opportunity for other parties to protect their rights and the application of controls in earnings management and this will be in the units engaged in earnings management policy and related activities and the activities of financial Kalmkavat and bonuses, commissions ... etc. Also concerned with the assessment of governance performance of economic units by achieving effective and efficient performance and protect assets.
International institutions has developed criteria for the application of globalization, including:
1 - Economic Cooperation and Development ( OECD ) :
as it has prepared principles for the governance of public joint stock companies in 2004
2 - International Settlement Bank - the Basel Committee:
This is on the bank to organize the work of banks in the world in order to reduce the level of risk that banks facing Ahamaitha of economic shocks and longer governance rules issued by the Basel Committee on the main reference for all banks in the world.
3 - International Finance Organization:
issued rules of governance is very close to the rules issued by the Organisation for Economic Co-operation and Development to contribute to the governance of public companies.
And check governance following objectives: to
achieve justice and transparency and fighting corruption and predict risks early in advance and impose effective control on the performance of economic units and strengthen the accounting systems, as well as a review of financial and operational performance , economic unity and evaluate the performance of senior management and enhance confidence, improve competitiveness and increase the competitive value of the units economic as well as the deepening of the culture of the application of laws and abide by doubling the economic unity profits and strengthen citizen 's confidence in the economic and political structure of the state and span up to enhance investor confidence in financial markets, taking into account the interests of all parties , stakeholders and achieve harmony, confidence and activate communication with them, has been set by the economic co - operation and development ( OECD ) .

Based governance on:
1 - Transparency: that the disclosure and transparency in all information relating to theentity or company corner of governance, here we focus on financial information because of their active role in achieving the development goals, and we assure not to disclose only, but on the quality of information.
2 - Accountability: A shareholder is entitled to the executive management accountable for its performance , a right guaranteed by law and governance systems, also included the responsibility of the executive management in front of the Board of Directors and the responsibility of the board of directors to shareholders.
3 - Responsibility: The corporate governance elevate a sense of responsibility to the rip administration (executive management and the board of directors) and pay board members to behave in a highly professional work ethic.
4 - equality: the equality between junior and senior shareholder, owner of one share him with the rights of the owner of one million shares Kaltsoat and accountability of the board of directors and others.
Summed up the proper application of corporate governance controls , including the following:

external controls:
an overall investment climate in the state , such as the laws regulating economic activity (capital market law, corporate law, regulation of competition and prevent monopolistic practices and bankruptcy laws) as well as the efficiency of the financial sector in the provision of the necessary funding, competitive degree markets and factors of production, the efficiency of the regulatory agencies in the provisions of the Superintendency of companies (capital market and Exchange Commission) as well as other institutions such as specialized lawyers, auditing and credit rating of financial, investment and consulting offices. The external controls to ensure proper functioning of the company and prevent the conflict between social returns and private returns.

Internal controls:
a company 's internal procedures for any rules that determine how the decision - making and distribution of powers within the company between the General Assembly and the executive management and the board of directors and the availability of these procedures to prevent conflicts of interest between these parties.
The application of the principles of governance:
1 - The presence of an effective framework: the
need for an effective framework in the state laws and regulations and financial markets and should this framework be effective and the impact on the overall economic performance and the integrity of the markets and economic transparency and effectiveness.
2 - to ensure shareholders ' equity:
ensuring the existence of legal ways to register ownership of shares, the possibility of transforming the ownership of shares, the possibility of obtaining information about the company on a regular basis and in a timely manner, to participate and vote in the General Assembly, to participate in the company 's profits, and must get shareholders to adequate and accurate information for the core of the company changes such as amending the Articles of Association, to issue additional shares, extraordinary operations , such as selling the company 's assets
3 - equal treatment of shareholders:
namely equality between junior and senior contributor owner of one share him with the rights of the owner of one million shares Kaltsoat and accountability of the board of directors , and others should be small shareholders protection exploit the major contributor of the owners of the royal lineage.
4 - Disclosure and transparency:
there must be an independent external audit by a qualified independent auditor to be capable of being accountable to shareholders.
5 - the responsibility of the Board of Directors:
should provide guidance and strategic direction of the company as well as effective control over the performance of the executive administration contrast, the Board of Directors held accountable by the shareholders.
It is the responsibility of the Board: the
strategy of the company and guide the development of as well as the development of action plans and budgets and policy risks in addition to developing performance targets and review implementation. Overseeing the corporate governance practices and make the necessary changes when needed, determine the salaries, allowances and supervision of the senior executives in the company. Ensure transparency in the nomination of board members and elected. Prevent conflicts of interest between the board and the executive management and shareholders Amomm, ensure the accuracy and transparency of the company 's accounts through rigorous oversight by independent auditors, overseeing disclosure processes.

* ECONOMIC head of Baghdad 's forum[/rtl]

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Established in 2006 as a Community of Reality

Established in 2006 as a Community of Reality

Governance and financial crises

Governance and financial crises

Governance and financial crises

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