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Applied Corporate Governance

In: Business and Management

Submitted By sihanzhou
Words 822
Pages 4
1.What does Applied Corporate Governance mean to you?
As for me, Applied Corporate Governance is a subject about the application of mechanisms of management and supervision of a corporation. Rights and responsibilities are distributed to different people in the corporation, such as shareholders, the Board of Directors, managers and so on. Corporation governance also covers the rules and procedures for decision making of corporate affairs. Besides, it also includes the whole control structure of the corporation.

2.Which are the top 3 most important institutions for the Capital Markets in HK, and why?
Securities & Futures Commission (SFC), Office of the Commissioner of Insurance (OCI) and Hong Kong Monetary Authority (HKMA)
The Securities and Futures Commission (SFC) of Hong Kong regulates the securities and futures markets in Hong Kong. Its responsibility is to ensure the order of security and future markets in Hong Kong, to protect the rights of investors and to promote Hong Kong as a key financial center both in China and all over the world.
Office of the Commissioner of Insurance (OCI) regulates the insurance in Hong Kong. According to the Insurance Companies Ordinance, the primary objective of OCI is to supervise the financial conditions and operations of authorized insurers, and to facilitate the development of the insurance industry.
The Hong Kong Monetary Authority (HKMA) is the currency board of Hong Kong. According to the Exchange Fund Ordinance, the primary objective of HKMA to stabilize Hong Kong’s banking system and currency, and to promote the development of the financial system in Hong Kong.
Therefore, Securities & Futures Commission (SFC), Office of the Commissioner of Insurance (OCI) and Hong Kong Monetary Authority (HKMA) are the most important institutions for the Capital Markets in HK.

3.Which are the top 3 most important institutions for the Capital Markets in China, and why?
China Securities Regulatory Commission (CSRC), China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC)
China Securities Regulatory Commission (CSRC) is a ministerial-level public institution under the State Council. According to several relevant laws, it regulates the securities and futures markets in China in a unified manner. The major objective of CSRC is to maintain an orderly securities and futures market and to make sure the operation of the capital market is legal.
China Banking Regulatory Commission (CBRC) formulates rules and regulations for supervision to banking institutions and authorizes the establishment, changes, termination as well as the business scope of the banking institutions.
China Insurance Regulatory Commission (CIRC) regulates the insurance products and market in China and ensures the stable and legal operations of insurance industry.
Therefore, China Securities Regulatory Commission (CSRC), China Banking Regulatory Commission (CBRC) and China Insurance Regulatory Commission (CIRC) are the most important institutions for the Capital Markets in China.

4.What are the top 3 ways, and why, that Corporate Governance can improve business performance?
Internal corporate governance controls, external corporate governance controls and the independent auditor
Internal corporate governance controls supervise and monitor activities and then take corrective action to accomplish goals of the organization. It includes internal control procedures and internal auditors, monitoring by the Board if Directors and by large shareholders and so on.
External corporate governance controls are the controls that external stakeholders use to exercise over the organization. It includes demand for performance information (financial statements) and the relevant assessment, etc.
The auditing firms act as independent auditor to reduce the information risk for users.
Corporate Governance makes the work of management more transparent for shareholders and stakeholders. It also helps safeguard the rights of shareholders (such as voting rights in general meetings). What’s more, it allows the corporate manages the risk involved in every investment opportunity by comparing the benefit and potential problems brought by these opportunities.

5.What are the top 3 things, and why, that impedes the adoption of real Corporate Governance in Asian corporations?
The characteristics of ownership of Asian corporations: As for many corporations in Asia, one or several members of a family tightly hold the majority of shares. The corporation is often affiliated with another corporation also controlled by the same family or relevant relatives. Therefore, minority investors have little power to take part in Corporate Governance because of the ownership concentration.
Group affiliation: Compared with independent firms, business groups are linked to greater use of internal markets, which may lead to greater management and agency problems and resource misallocation
Financial disclosure and transparent: Asia corporations have relatively lower levels of financial disclosure quality and transparency.
6.What are your top 3 suggestions, and why, to improve the Corporate Governance concept and related implementation in Asian corporations?
External auditors: Controlling party can employ high quality external auditors to mitigate minority investors’ concern.
Dividend policy: By paying dividends, the manager can alleviate the concern about agency problems.
Foreign listing: Through accessing to foreign markets, corporations encounter a better external governance regime and commit to a higher level of financial disclosure.…...

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