Question

What is ASIC and what is its role? Provide examples to illustrate your answer.

What is ‘corporate governance’? Provide examples to illustrate your answer.

Discuss the concept of ‘corporate liability’. Provide examples to illustrate your discussion.

Answer 1

Corporate Governance is the system by which companies are directed and governed by the management in the best interests of the stakeholders and others ensuring better management, greater transparency and timely financial reporting. The three key aspects of corporate governance includes inter-alia, accountability, transparency and equality of treatment for all stakeholders. Since the pivotal role in any system of corporate governance is performed by the Board of Directors, they are primarily accountable and responsible for governance of their companies.

Big corporates with proper heirarchical authorities and working through segregation of duties based on the ranks of the employees is a good example of corporate governance.

A corporate liability is an obligation of an entitity that has arisen from the past events and the settlement of such obligation is expected to result in outflow of economic resources from the said entitiy. Example: Amount payable on account of trade payables constitutes corporate liability.