Jo Iwasaki's Presentation, 6 Januari 2014

8/11/2019 Jo Iwasaki's Presentation, 6 Januari 2014

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BUSINESS WITH CONFIDENCE icaew.com

Jo Iwasaki, Head of Corporate Governance, ICAEW

What are the overarching principles ofcorporate governance?






© ICAEW 2013

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The ICAEW members in business

55% of FTSE 100 companies have an ICAEW

Chartered Accountant as chairman, CEOor CFO

80% of FTSE 100 company boards include atleast one ICAEW member.




© ICAEW 2013

Publicinterest

Memberinterests

The ICAEW charter




© ICAEW 2013

SustainableBusiness

ICAEW thought leadership

re:Assurance

Dialogue inCorporate

Governance

FinancingChange

FinanceInnovation

Lab

InspiringConfidencein Financial

ServicesMarket

Foundations

CrisisWithout aLegacy?

Informationfor BetterMarkets

AuditQualityForum

FinanceDirection

Towards aBetter Tax

System

MakingInformation

SystemsWork




© ICAEW 2013

Dialogue in corporate governance

Project process

• ICAEW Corporate Governance Committee:including board members, investors,

practitioners• Engaging wider stakeholders, such as

academics and regulators•

Facilitating on-going debate with other interestedparties




© ICAEW 2013


Five questions: New challenges

• What should companies be responsible for?• What are the overarching principles of

corporate governance?• When is comply or explain the right approach?• How diverse should boards be?• Who should be covered by codes?




© ICAEW 2013


Five questions: New challenges




© ICAEW 2013

Background

Why are these questions important?

• Recent events triggered by financial crisis

• Changes in capital markets

• Challenges to companies




© ICAEW 2013

What should good corporate governanceachieve?

‘… the boards must be free to drive theircompanies forward, but exercise that

freedom within a framework of effectiveaccountability. This is the essence of anysystem of good corporate governance.’

(from Cadbury Report, 1992)




© ICAEW 2013

What are the overarching principles of corporate governance?

Four fundamental responsibilities

• Achieving a business purpose

• Behaving in a socially acceptable way• Meeting legal and regulatory requirements

• Stating how responsibilities are met




© ICAEW 2013


How can these responsibilities help companies?

• To be agile and adaptable to their environment

• To identify new opportunities

• To rebuild public trust




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Examples

• Executive remuneration

• Bank bailouts

• Short termism• Aggressive tax avoidance




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How should the board lead the company?

• Satisfying a range of responsibilities

• Decisions to facilitate long-term success

• Developing a sustainable business model

• Going beyond compliance




© ICAEW 2013


Overarching principles

• Leadership

• Capability

• Accountability• Sustainability

•

Integrity




© ICAEW 2013

Characteristics of overarching principles

•

Linked to business purpose• Related to outcomes• Focused on what is most important• Clear and concise• Durable•

Widely accepted




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Guiding companies in the time of crisis

• Having guidelines for difficult governance issues

• Open and dynamic board processes

• Using judgement appropriately

• Promote a robust corporate culture




© ICAEW 2013

Challenges to overarching principles

Following principles is not always easybecause:• Subjectivity in concepts

– Need to use judgement – Explain why judgement is appropriate

• Aspirational – Intended to continue improving governance




© ICAEW 2013

Corporate Governance:

New ChallengesGo to: icaew.com/newchallenges

Thought Leadership Go to: icaew.com/thoughtleadership

For more information

ICAEW Go to: icaew.com

SEA Region OfficeGo to:

icaew.com/en/about-icaew/where-we-are/south-east-asia




© ICAEW 2013

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Jo Iwasaki's Presentation, 6 Januari 2014