Corporate Governance — How to Add Value to Your Company A Practical Implementation Guide Alex Knell AMSTERDAM • BOSTON • HEIDELBERG • LONDON NEW YORK • OXFORD • PARIS • SAN DIEGO SAN FRANCISCO • SINGAPORE • SYDNEY • TOKYO CIMA Publishing is an imprint of Elsevier CImA PUBLISHING CIMA Publishing An imprint of Elsevier Linacre House, Jordan Hill, Oxford OX2 8DP 30 Corporate Drive, Burlington, MA 01803 First published 2006 Copyright © 2006, Elsevier Ltd All rights reserved The right of Alex Knell to be identified as the author of this work has been asserted in accordance with the Copyright, Designs and Patents Act 1988 No part of this publication may be reproduced in any material form (including photocopying or storing in any medium by electronic means and whether or not transiently or incidentally to some other use of this publication) without the written permission of the copyright holder except in accordance with the provisions of the Copyright, Designs and Patents Act 1988 or under the terms of a licence issued by the Copyright Licensing Agency Ltd, 90 Tottenham Court Road, London, England W1T 4LP Applications for the copyright holder’s written permission to reproduce any part of this publication should be addressed to the publisher Permissions may be sought directly from Elsevier’s Science and Technology Rights Department in Oxford, UK: phone: (+44) (0) 1865 843830; fax: (+44) (0) 1865 853333; e-mail: permissions@elsevier.com You may also complete your request on-line via the Elsevier homepage (http://www.elsevier.com), by selecting ‘Customer Support’ and then ‘Obtaining Permissions’ British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloguing in Publication Data A catalogue record for this book is available from the Library of Congress ISBN ISBN 7506 6924 978 7506 6924 For information on all CIMA Publishing Publications visit our website at www.cimapublishing.com Typeset by Cepha Imaging Pvt Ltd, Bangalore, India Printed and bound in Great Britain Contents Preface An Overview of the Book Acknowledgements Section 1 Tell Me What I Need to Know about Corporate Governance (CG) xi xiii xv Enhancing Value Objective What exactly is Corporate Governance (CG)? How to make things change Layout Results of compliance 5 8 No CG Recognition – The Company You Keep 11 Proving a negative Recent history fuels anxiety Solution – keeping businesses honest 13 13 17 Why No CG? 19 Basic Concepts 25 A code of ethics Conflicts of interests in business 27 27 Applied Concepts 29 Independence Responsibility Accountability Fairness Reputation 31 31 32 32 32 Director’s Duties – A Reminder 33 Statutory duties Fiduciary duties Duties of skill and care Other and emerging legal obligations Executive and Non-Executive Directors (NEDs) Company Secretary 35 35 35 36 37 37 Contents ● iv Who are the Other Stakeholders? 39 Company workforce Banks and lenders Customers Suppliers Government Local community Other Summary 41 41 41 41 42 42 42 42 The Key Areas Addressed by CG 43 Decision-making powers Risk-taking Directors’ remuneration Financial reporting and auditing Communications between directors and shareholders 45 46 46 47 The ACCEPTS™ Method 51 ACCEPTSTM 10 49 What is the Method? Scoring Chart – ACCEPTSTM Method Instructions Excel® spreadsheet 53 53 54 Basic Steps 55 Positioning principle In plain English? What needs to be done? Checklists 57 57 57 58 Section Detailed Implementation 11 The Board What is the principle? Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 59 61 63 63 63 64 65 67 68 68 12 13 15 71 What is the principle? Supporting principle In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 73 73 73 73 74 75 75 75 Board Balance 77 What is the principle? Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 79 79 79 80 81 84 84 84 Board Appointments 87 What is the principle? Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 89 89 89 89 90 93 94 94 Board Information 99 What is the principle? Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 101 101 101 102 102 104 104 104 Contents 14 The Chairman and Chief Executive ● v 16 Contents 17 ● vi 18 19 Board Performance Evaluation 107 What is the principle? Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 109 109 109 109 109 110 111 111 Board Re-election 113 What is the principle? Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 115 115 115 116 116 118 119 119 Board – Rewards (a) Level and Make-Up 123 What is the principle? Supporting principle In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 125 125 125 125 127 129 131 131 Board – Rewards (b) Procedure 135 What is the principle? Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 137 137 137 138 139 141 142 142 20 21 23 24 147 What is the principle? Supporting principle In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 149 149 149 149 150 151 152 152 Accountability (b) Internal Control 155 What is the principle? In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 157 157 157 158 159 159 159 Accountability (c) Audit Committee and Auditors 161 What is the principle? In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 163 163 163 165 169 171 171 Relations with Shareholders – Dialogue 177 What is the principle? Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 179 179 179 180 181 182 182 182 Relations with Shareholders – Constructive Use of the AGM 185 What is the principle? 187 Contents 22 Accountability (a) Financial Reporting ● vii 25 Contents 26 ● viii Supporting principles In plain English? What needs to be done? Components in this section Summary checklists Score Chart Excel® spreadsheet 187 187 187 188 189 190 190 How Did You Do? 193 Review where you are What my results mean? A word of encouragement Grand Score Chart 195 195 195 197 What to Do Now? 199 Initial review An essential requirement Map of Code CG Requirements Plan of attack – preparation Plan of attack – the Board itself Plan of attack – the Board Committees Plan of attack – the shareholders Plan of attack – the financial reporting and auditors 201 201 202 202 203 204 205 206 Appendix Annual Report – CG Disclosures Annual report section: Directors, officers and advisors Annual report section: Corporate Governance The Board Board Committees Appendix 209 211 211 211 212 Matters Reserved for the Board ICSA Guidance Note 217 Appendix The Role of the Chairman 231 Appendix The Role of the Chief Executive 235 Appendix Guidance on the Role of the Non-Executive Director 239 Appendix Sample Letter of Non-Executive Director Appointment Appointment Time commitment Role Fees Outside interests Confidentiality Induction Review process Insurance Independent professional advice Committees Appendix Appendix Chairman of the Nomination Committee – Job Description Chairman of the Remuneration Committee – Job Description 245 245 245 246 246 247 247 247 247 248 248 249 Performance evaluation of the Board Performance evaluation of the Non-Executive Director ● ix 253 Chairman of the Audit Committee – Job Description 257 Appendix 10 Performance Evaluation Guidance Contents Appendix 243 261 264 265 Appendix 11 The Whistle-blowing Procedure 267 Appendix 12 Nomination Committee – Terms of Reference 271 Appendix 13 Remuneration Committee – Terms of Reference ICSA Guidance Notes 283 Reference Number: ICSA ICSA Guidance Note 031020 INTERNATIONAL The Committee shall also review the effectiveness of the audit CG — How to Add Value to Your Company 8.5.6 review any representation letter(s) requested by the external auditor before they are signed by management; ● 306 8.5.7 review the management letter and management’s response to the auditor’s findings and recommendations; and 8.5.8 develop and implement a policy on the supply of non-audit services by the external auditor, taking into account any relevant ethical guidance on the matter 8.6 Reporting Responsibilities 8.6.1 The Committee Chairman shall report formally to the board on its proceedings after each meeting on all matters within its duties and responsibilities 8.6.2 The Committee shall make whatever recommendations to the board it deems appropriate on any area within its remit where action or improvement is needed 8.6.3 The Committee shall compile a report to shareholders on its activities to be included in the company’s annual report 8.7 Other Matters The Committee shall: 8.7.1 have access to sufficient resources in order to carry out its duties, including access to the company secretariat for assistance as required; 8.7.2 be provided with appropriate and timely training, both in the form of an induction programme for new members and on an ongoing basis for all members; “The information given in this Guidance Note, is provided in good faith with the intention of furthering the understanding of the subject matter Whilst we believe the information to be accurate at the time of publication ICSA and its staff cannot however accept any liability for any loss or damage occasioned by any person or organisation acting or refraining from action as a result of any views expressed therein If the reader has any specific doubts or concerns about the subject matter they are advised to seek legal advice based on the circumstances of their own situation.” © Institute of Chartered Secretaries & Administrators, 16 Park Crescent, London WIB IAH Tel: 020 7580 4741 Fax: 020 7323 1132 Reference Number: ICSA ICSA Guidance Note 031020 INTERNATIONAL 8.7.3 give due consideration to laws and regulations, the provisions of the Combined Code and the requirements of the UK Listing Authority’s Listing Rules as appropriate; 8.7.4 be responsible for co-ordination of the internal and external auditors; 8.7.6 at least once a year, review its own performance, constitution and terms of reference to ensure it is operating at maximum effectiveness and recommend any changes it considers necessary to the board for approval Authority The Committee is authorised: 9.1 to seek any information it requires from any employee of the company in order to perform its duties; 9.2 to obtain, at the company’s expense, outside legal or other professional advice on any matter within its terms of reference; and 9.3 to call any employee to be questioned at a meeting of the Committee as and when required October 2003 “The information given in this Guidance Note, is provided in good faith with the intention of furthering the understanding of the subject matter Whilst we believe the information to be accurate at the time of publication ICSA and its staff cannot however accept any liability for any loss or damage occasioned by any person or organisation acting or refraining from action as a result of any views expressed therein If the reader has any specific doubts or concerns about the subject matter they are advised to seek legal advice based on the circumstances of their own situation.” © Institute of Chartered Secretaries & Administrators, 16 Park Crescent, London WIB IAH Tel: 020 7580 4741 Fax: 020 7323 1132 CG — How to Add Value to Your Company 8.7.5 oversee any investigation of activities which are within its terms of reference and act as a court of the last resort; and ● 307 This Page is Intentionally Left Blank Appendix15 CG Role of the Company Secretary ICSA Guidance Notes This Page is Intentionally Left Blank Reference Number ICSA ICSA Guidance Note Specimen job description for the Corporate Governance role of the Company Secretary ◆ Ensuring the smooth running of the board’s and board ◆ ◆ ◆ ◆ committees’ activities by helping the chairman to set agendas, preparing papers and presenting papers to the board and board committees, advising on board procedures and ensuring the board follows them Keeping under close review all legislative, regulatory and corporate governance developments that might affect the Company’s operations, and ensuring the board is fully briefed on these and that it has regard to them when taking decisions Ensuring that the concept of stakeholders (particularly employees - see section 309 Companies Act 1985) is in the board’s mind when important business decisions are being taken Keeping in touch with the debate on Corporate Social Responsibility and stakeholders, and monitoring all developments in this area and advising the board in relation to its policy and practices with regard to Corporate Social Responsibility and its reporting on that matter To act as a confidential sounding board to the chairman, non-executive Directors and executive Directors on points that may concern them, and to take a lead role in managing difficult inter-personal issues on the board e.g the exit of the Directors from the business To act as a primary point of contact and source of advice and guidance for, particularly, non executive Directors “The information given in this Guidance Note, is provided in good faith with the intention of furthering the understanding of the subject matter Whilst we believe the information to be accurate at the time of publication ICSA and its staff cannot however accept any liability for any loss or damage occasioned by any person or organisation acting or refraining from action as a result of any views expressed therein If the reader has any specific doubts or concerns about the subject matter they are advised to seek legal advice based on the circumstances of their own situation.” © Institute of Chartered Secretaries & Administrators 16 Park Crescent London WIB IAH Tel: 020 7580 4741/ Fax: 020 7323 1132 CG — How to Add Value to Your Company ICSA Guidance Note 021001 ● 311 Reference Number ● 312 ICSA Guidance Note CG — How to Add Value to Your Company 021001 ◆ ◆ ◆ ◆ ◆ ◆ ICSA as regards the Company and its activities in order to support the decision making process To act as an additional enquiring voice in relation to board decisions which particularly affect the Company, drawing on his experience and knowledge of the practical aspects of management including law, tax and business finance To act as the “Conscience of the Company.” To ensure, where applicable, that the standards and/or disclosures required by the Combined Code annexed to the UK Listing Rules are observed and, where required, reflected in the Annual Report of the Directors – the Secretary usually takes the lead role in drafting the Annual Report, including the Remuneration disclosures and agreeing these with the board and board committee Compliance with the continuing obligations of the Listing Rules e.g ensuring publications and dissemination of Report and Accounts and interim reports within the periods laid down in the Listing Rules; dissemination of Regulatory News Announcements such as Trading Statements to the market; ensuring that proper notification is made of Directors’ dealings and the acquisition of interests in the Company’s incentive arrangements Managing relations with investors, particularly institutional investors, with regard to corporate governance issues and the board’s practices in relation to corporate governance To induct new Directors into the business and their roles and responsibilities As regards offences under the Financial Services and Markets Act (eg s395), ensuring that the board is fully “The information given in this Guidance Note, is provided in good faith with the intention of furthering the understanding of the subject matter Whilst we believe the information to be accurate at the time of publication ICSA and its staff cannot however accept any liability for any loss or damage occasioned by any person or organisation acting or refraining from action as a result of any views expressed therein If the reader has any specific doubts or concerns about the subject matter they are advised to seek legal advice based on the circumstances of their own situation.” © Institute of Chartered Secretaries & Administrators 16 Park Crescent London WIB IAH Tel: 020 7580 4741/ Fax: 020 7323 1132 Reference Number ICSA aware of its responsibility to ensure that it does not mislead the market by putting out or allowing the release of misleading information about its financial performance or trading condition, or by omitting to state information which it should state, or by engaging in a course of conduct which could amount to misleading the market ◆ Ensuring compliance with all statutory filings, e.g forms 288, 88(2), Annual Returns, filing of resolutions adopted at Annual General Meetings/new Articles of Association and any other filings required to be made with Companies House ◆ Making arrangements for and managing the whole process of the Annual General Meeting and establishing, with the board’s agreement, the items to be considered at the AGM, including resolutions dealing with governance type matters, eg the vote on the Remuneration Report and votes on special incentive schemes involving directors Information about proxy votes etc The above comprises a simple list of the main ‘Corporate Governance’ activities carried out by the Company Secretary There are many other matters (e.g risk management, trading standards etc) for which the Company Secretary will often be responsible and the extent of his other duties will depend on the particular company Further details of these ‘other duties’ can be found in the results of an ICSA survey on the Responsibilities and Salaries of Company Secretaries 2000/2001 “The information given in this Guidance Note, is provided in good faith with the intention of furthering the understanding of the subject matter Whilst we believe the information to be accurate at the time of publication ICSA and its staff cannot however accept any liability for any loss or damage occasioned by any person or organisation acting or refraining from action as a result of any views expressed therein If the reader has any specific doubts or concerns about the subject matter they are advised to seek legal advice based on the circumstances of their own situation.” © Institute of Chartered Secretaries & Administrators 16 Park Crescent London WIB IAH Tel: 020 7580 4741/ Fax: 020 7323 1132 CG — How to Add Value to Your Company ICSA Guidance Note 021001 ● 313 This Page is Intentionally Left Blank Index This Page is Intentionally Left Blank ACCEPTS™ (Accelerated Combined Code Enabling Plan and Tracking System) Method, 7, 53–4 calculation, 54 principles, 187 requirement, 187–8 score charts, 190–2 Board appointments components, checklists, 53 checklists, 93–4 score chart, instructions, 53–4 components, code provisions, 90–3 Annual report criteria, objective, 89 accuracy, 161 Nomination Committee, 89 CG disclosures, 211–16 principles, 89 clarity, 161 requirement, 89 Arthur Levitt, 6, 7, 48 ASB U1TF, 10, 138 Audit Committee Chairman, role, 259 score chart, 94–7 Board balance checklists, 84 components, code provisions, 81–3 Board accountability Audit Committee and auditors checklists, 169–70 requirement, 80 score charts, 84–6 Board, CG implementation ICSA guidelines, 163 checklists, 67–8 principles, 163 components, code provisions, 65–7 requirement, 163–4 principles, 63 score chart, 171–5 requirement, 64–5 financial reporting role checklists, 151–2 entrepreneurial leadership, 63 components, code provisions, 150 NEDs role, 63–4 principles, 149 strategic aims, set, 63 requirement, 149–50 score charts, 152–4 internal control values/standards, set, 63 score chart, 68–70 Board Committees checklists, 159 Audit Committee, 213–14 components, code provisions, 158 Nomination Committee, 214–15 principles, 157 Remuneration Committee, 212–13 requirement, 157–8 responsibility, 157–8 score chart, 159–60 remuneration policy, 213 Board information checklists, 104 checklists, 182 components, code provisions, 102–03 components, code provisions, 181 principles, 101 Board and shareholders, dialogue principles, 179–80 Chairman, role, 101 requirement, 180 Company Secretary, responsibilities, 101 score charts, 182–4 Board Annual General Meeting (AGM), constructive use shareholder relationship requirement, 102 score charts, 104–05 Board, performance evaluation checklists, 189 components, code provisions, 109–10 components, code provisions, 188–9 checklists, 110 Index components, code provisions, 165–9 principles, 79–80 ● 317 Board, performance evaluation (Continued ) principles, 109 requirement Annual reviews, 109 score charts, 111–12 Board, re-election other, 42 suppliers, 41 CG implementation, basic steps checklists, 58 principle, positioning, 57 Company Secretary, 57 Non-Executive directors (NEDs), 57 checklists, 118–19 requirement, 57 components, code provisions, 116–18 score chart, 57 principles, 115 process, 115 CG noncompliance, reasons, 21 requirement, 116 CG recognition, need, 13 score charts, 119–21 CG regulation, history Index Board rewards, level and make-up Combined Code, UK, 13 components, code provisions, 127–9 Enron, 13–16 performance-related remuneration system, design Schedule A, rules, 126–7 principles, 125 ● 318 Cadbury Report, 14 Checklists, 129–30 Arthur Andersen, auditor, 16 garaging losses, 15 options, Mega-grants of, 15 tactics/schemes, 15–16 process, 125 Royal Dutch Shell, 14 requirement, 125–6 Sarbanes-Oxley Act (SOX) 2002, 13 score chart, 131–3 WorldCom, 16–17 Board rewards, procedure checklists, 141–2 Arthur Andersen, auditor, 17 scams, 16–17 components, code provisions, 139–41 CG requirements, map of code, 202 principles, 137 CG standards, Board Remuneration Committee, 137 dimensions/key areas process, 138 decision-making powers, 45–6 requirement, 138 Director remuneration, 46–7 Schedule B rules, stipulations, 138–9 score chart, 142–4 Business bust, prevention CG compliance, 18 Business risk, types Directors and shareholders, communication, 49 financial reporting and auditing, 47–9 risk-taking, 46 Chairman and Chief Executive compliance, 155 checklists, 75 financial, 155 components, code provisions, 74 operational, 155 principles, 73 Business, stakeholders banks and lenders, 41 NEDs, 73 stakeholders, 73 CG implementation, process, 42 requirement, 73 company workforce, 41 role, 73 customers, 41 score chart, 75–6 government, 42 Chairman, role, 233–4 local community, 42 Chief Executive, role, 237 Financial Reporting Council (FRC), Financial Services Authority (FSA), 270 FTSE 350 companies, aim, 80 Grand Score Chart, 197 ICSA guidelines Audit Committee, terms of reference, 295–307 Board, matters reserved matters, schedule of, 222–9 multiple signatures, 220–1 urgent matters, 221–2 Company Secretary, CG role, 311–13 Nomination Committee, terms of reference, 273–80 Remuneration Committee, terms of reference, 285–92 ISO 900X compliance, 45 NED independence, criteria, 80 New York Stock Exchange (NYSE) ethical code, areas, 27–8 Nomination Committee Chairman, role, 249 Non-Executive Director appointment, sample letter, 243–6 role, 241–2 Performance evaluation, guidelines Directors, accountability, 35 Directors, duties fiduciary, 35 legal obligations, 36 skill and care, 35–6 statutory, 35 Companies Acts (1985, 1989), requirements, 35 Enron/WorldCom failure, reasons, 17, 47–8 Executive and Non-Executive Directors (NEDs), role, 37 Board, 264–5 Non-Executive Director, 265–6 process, 263 Public Interest Disclosure Act (PIDA), 269 Remuneration Committee Chairman, role, 255 String vest compliance, 195 Whistle-blowing Procedure, 81, 269–70 Index Combined Code/the Code, 6, 13, 28 Company Secretary, role, 37 Company, stakeholders, 13 Conflict of interest, examples, 31 Corporate Governance (CG) applied concepts, business accountability, 32 fairness, 32 independence, 31 reputation, 32 responsibility, 31 basic concepts code of ethics, 27 conflicts of interest, business in, 27–8 honesty, 27 openness, 27 transparency, 27 compliance, 8–9 definitions, 5–7 objective, plan of attack Board, 203–04 Board committees, 204–05 financial reporting and auditors, 206–07 preparation, 202–03 shareholders, 205–06 requirement, essential, 201 review, initial, 201 ● 319 This Page is Intentionally Left Blank [...]... due to merit, and this places a disproportionate burden on the independent NEDs to maintain balance – Giving lavish rewards to the independent NEDs soon knocks the independence out of them! They are less inclined to ask difficult questions once their price is reached CG — How to Add Value to Your Company Incidentally, remember who the auditors were? Arthur Andersen ● 17 CG — How to Add Value to Your Company. .. Tell Me What I Need to Know about Corporate Governance (CG) This Page is Intentionally Left Blank 1 Enhancing Value This Page is Intentionally Left Blank Objective The purpose of this book is to show you how to add value to your business It is my contention that driving Corporate Governance (CG) into the fabric of your company has a similar impact on the value of your business, as adopting professional... So, how do you tell investors that they have nothing to worry about and that you aren’t hiding skeletons in your cupboard? And don’t be so naïve to think it is interest in your company There are opinion of your business What about your customers, your suppliers, etc.? Chapter 7 just investors who have an other stakeholders with an your bank, your employees, This is discussed further in Recent history... here to stay and their demands are rising Corporate Governance is not going out of fashion The reasons for this are outlined cases like Enron and Worldcom, which will be dealt in Chapter 2 What exactly is Corporate Governance (CG)? Governance means to control and regulate; the exercise of influence to maintain good order and adherence to predetermined standards of behaviour CG — How to Add Value to Your. .. Add Value to Your Company It is primarily aimed at senior managers and directors of ambitious small and medium-sized enterprises (SMEs) Particularly, those with a view to selling all or part of their businesses – or an outright flotation in the medium term ● 5 CG — How to Add Value to Your Company Corporate Governance (CG) is the regulating influence applied to the affairs of a company to maintain good... demands will not be a millstone in the flotation process, as you will have much of this work completed The key thing to keep in mind is that CG compliance shows real confidence in the future and in the high growth prospects of your business It is a frame of mind and an attitude that indicates real ambition and inspires those involved CG — How to Add Value to Your Company Remember, your business will be... techniques or quality standards The potential buyer of your business perceives this value, and it is indeed real to your company So how much is your company worth? £2 million, £5 million, £20 million? What if CG added a 10% premium to that price? Or more? What if CG increased the pool of buyers at the asking price? What if CG put your business at the top of someone’s shopping list? Then would it be worth... CG — How to Add Value to Your Company The reason is that shareholders of quoted plcs have been burned so many times Particularly and spectacularly in the last 20 years! Fraud and greed scandals simply weaken investor confidence Less confidence means less active stock markets, which lead to lower or stagnating prices Or no market ● 13 However, even in 2004, the mighty Royal Dutch Shell admitted to misreporting... 2000 the total salary, bonuses, exercised options and perks paid to Enron’s CEO, Kenneth Lay, was $211 million Enron President, Jeffrey Skilling, was rewarded to the tune of $130 million during that same period ● 15 Houston office of Arthur Andersen The audit fees were dwarfed by consulting fees CG — How to Add Value to Your Company It is thought that much of these fees had been paid for advice to devise... but we need punishment laws anyway ● 7 Layout CG — How to Add Value to Your Company This book is set out in two sections ● 8 The first section addresses the basic theory underpinning CG The purpose is to show the origin of the thinking that has been developed An understanding of this will help you decide what compliance issues are immediately useful to your business, and which can wait You can’t do everything ... to ask difficult questions once their price is reached CG — How to Add Value to Your Company Incidentally, remember who the auditors were? Arthur Andersen ● 17 CG — How to Add Value to Your Company. .. CG — How to Add Value to Your Company Independence ● 31 Accountability CG — How to Add Value to Your Company This is the requirement of those in authority, and exercising responsibility, to justify... flotation in the medium term ● CG — How to Add Value to Your Company Corporate Governance (CG) is the regulating influence applied to the affairs of a company to maintain good order and apply predetermined