CS Intermediate Level
Corporate Governance and Ethics cheat sheet
Every chapter's key points, formulas and definitions on one page, for the last week before the exam. Each heading links to the chapter that explains it.
Overview of corporate governance and ethics
- Corporate governance is the system of rules, practices and processes by which a company is directed and controlled, balancing the interests of shareholders, management and the wider stakeholders its decisions affect.
- Good governance rests on four pillars: accountability, fairness, transparency and responsibility.
- The shareholder (Anglo-American) model puts shareholder value first, with dispersed ownership and market discipline; the stakeholder (Continental European/Japanese) model balances a wider range of interests, often with more concentrated ownership.
- Modern codes grew out of corporate failures: the UK's Cadbury Report (1992) and the US Sarbanes-Oxley Act (2002) after Enron, with Kenya's own codes following the same pattern.
- Law sets a binding minimum, while ethics reaches what is right where no law compels it, so conduct can be legal but unethical.
Key terms
- Shareholder (Anglo-American) model
- Prioritises shareholder value, with dispersed ownership and market-based discipline on management, dominant in the US and UK.
- Stakeholder (Continental European/Japanese) model
- Balances a wider range of interests, employees, banks, communities, often with more concentrated ownership and board representation for stakeholders beyond shareholders.
The rest of the sheet covers
- Theories of corporate governance and ethics
- Board governance models
- The board of directors
- Internal corporate documents
- Governance of risk
- Ethical behaviour
- Compliance with laws and regulations
- Contemporary issues and case studies
- Exam technique and revision
- Glossary