Jeorjeana L. Manguerra 45502 GOOD GOVERNANCE ACTIVITY #1 Exercise 1 SHORT ANSWER Describe the broad role of Board of Directors. Board of Directors exercises the corporate powers of a corporation and are the one that conducts all its business and controls its properties. Their role also includes hiring of the CEO or general manager of the business and assess the overall direction and strategy of the business and lastly it is their responsibility to develop a governance system within an organization. On what aspects do shareholders demand accountability from the Board of Directors? Since shareholders are the owner of the company and they are the one who elected the Board of Directors, they held the Board of Directors accountable for their company’s business operations and corporate governance as well as the maximization of their wealth while also taking into account the benefits of other stakeholders. Exercise 2 IDENTIFICATION 1. Approving financial reports and other public documents are responsibilities of? BOARD OF DIRECTORS 2. Responsible for the audit of the companies for compliance of policies and laws, audits efficiency and test of controls. AUDITOR 3. Responsible for the effective management of operations. MANAGEMENT 4. They are anyone that can be influenced, directly or indirectly, by the actions of the companies. STAKEHOLDERS 5. They provide oversight of internal and external audit function. AUDIT COMMITTEE Exercise 3 ESSAY “Maximizing shareholders’ wealth must always be the priority.” Must the other stakeholders’ interest be compromised to achieve this? Maximizing shareholders’ wealth must always be the priority but that doesn’t necessarily mean that the other stakeholders’ interest must be compromised in order to achieve it. As we all know there are different types of stakeholders, these are the customers, investors, employees, suppliers, communities and the government. These stakeholders have a great contribution on the success of one’s business or let’s say on the maximization of shareholders’ wealth. The great contribution of these stakeholders are their actions in which a certain business is so dependent, that is why a business organization must always align their interest to these stakeholders’ interest in all its activities. Also, corporate social responsibility must always be in practice because it benefits us all. To conclude this, a mutually beneficial relationship with all stakeholders will generate goodwill toward a certain business, which will lead to lasting success.