Governance concepts

Topics in this module

1. 01

   Companies, authority and agency

   Understand the corporate form, the division of decision-making powers and how agency, stewardship and stakeholder theories explain governance problems.

   10 sections · 10 min read

   1 video1 PDF2 imagesIncludes 1 flowchart guide

   See the topics covered

   1. Begin with the organisation, not the job title
   2. Limited liability has a specific meaning
   3. Public, proprietary and listed are different classifications
   4. Separate ownership rights from management authority
   5. Voting can signal a problem without immediately removing directors
   6. Agency theory explains a particular risk
   7. Monitoring, bonding and residual loss
   8. Stewardship and stakeholder perspectives add other questions
   9. Work through an authority problem
   10. Sources and further reading
2. 02

   Directors’ duties and independent judgement

   Apply the guide's directors' duties, distinguish independence from job titles and assess reliance, conflicts and financial warning signs.

   11 sections · 9 min read

   8 videos1 PDF9 imagesIncludes 8 flowchart guides

   See the topics covered

   1. Appointment creates responsibilities
   2. Duties attach to substance as well as titles
   3. Care is an active process
   4. The business judgment rule is not blanket immunity
   5. Reliance requires judgement
   6. Conflicts require a process
   7. Independence and executive status are separate
   8. Financial distress needs timely attention
   9. Information released to the market is a board concern
   10. Apply the duties to a board paper
   11. Sources and further reading
3. 03

   Boards, committees and accountability

   Connect board strategy, management, committee oversight and stakeholder relationships to the information and challenge needed for sound governance.

   12 sections · 10 min read

   4 videos4 PDFs11 imagesIncludes 1 flowchart guide

   See the topics covered

   1. Governance serves performance and conformance
   2. A board needs more than a backward-looking agenda
   3. Clarify the board-management relationship
   4. The chair creates conditions for challenge
   5. Committees concentrate attention without replacing the board
   6. Evaluate the work behind the committee name
   7. Internal and external assurance have different roles
   8. Investors and intermediaries influence governance
   9. Stakeholder engagement needs a purpose
   10. Regulation adds an external accountability layer
   11. Analyse a governance breakdown as a chain
   12. Sources and further reading
4. 04

   International governance systems

   Compare market-based and relationship-based governance, explain their trade-offs and understand why reforms cannot simply be transplanted between countries.

   10 sections · 8 min read

   1 video1 PDF3 images

   See the topics covered

   1. Governance develops within institutions
   2. Why attention to governance grows
   3. Market-based systems rely heavily on public information
   4. Relationship-based systems use continuing connections
   5. Compare the trade-offs, not a national ranking
   6. Board structures are one part of the system
   7. Reforms respond to particular weaknesses
   8. Enforcement and behaviour determine practical effect
   9. Apply the models to an original investment comparison
   10. Sources and further reading
5. 05

   Applying governance codes

   Use the guide's OECD 2023, UK 2018 and ASX 2019 frameworks to diagnose governance weaknesses and recommend evidence-based improvements.

   12 sections · 11 min read

   2 videos2 PDFs6 imagesIncludes 2 flowchart guides

   See the topics covered

   1. Identify the framework before applying a rule
   2. Principles, provisions and explanations do different jobs
   3. Use the OECD framework to locate the problem
   4. Turn an OECD issue into an actionable response
   5. Read the ASX principles as a connected system
   6. Capability includes diversity, succession and time
   7. Compare independence and committees carefully
   8. Reporting integrity extends beyond audited numbers
   9. Culture must reach the board through evidence
   10. Risk and pay should reinforce the same strategy
   11. Build a focused recommendation
   12. Sources and further reading
6. 06

   Governance beyond listed companies

   Adapt governance to family businesses, charities and public entities, connecting purpose, resource stewardship and accountability to their different settings.

   12 sections · 10 min read

   1 video1 PDF3 images

   See the topics covered

   1. Purpose changes the application, not the need for governance
   2. Family ownership removes some conflicts and creates others
   3. Proportionate controls can be effective
   4. A not-for-profit can earn a surplus
   5. Charities have specific governance responsibilities
   6. Overseas activity needs oversight beyond the payment
   7. Mission, capability and engagement belong together
   8. Public-sector accountability has additional layers
   9. Economy, efficiency and effectiveness answer different questions
   10. State ownership does not remove integrity risks
   11. Bring the module together
   12. Sources and further reading