Mastering Corporate Governance and Risk Management: A Comprehensive Guide

What is the role of the board of directors in corporate governance?

The board of directors is responsible for creating a framework for corporate governance.

Why is diversity important in corporate governance?

Increasing diversity in corporate boards is essential as it improves company performance, yet there is a severe lack of diversity with only 29% of Fortune 500 directors being women.

How can companies identify and analyze risks?

Companies can identify and analyze risks by following steps such as identifying the risks affecting the firm's project or outcomes, analyzing each specific instance of risk, and determining the likelihood and consequence of each identified risk.

What are the key principles of corporate governance?

The key principles of corporate governance include the distribution of rights and responsibilities in an organization, the role of the board of directors in creating a governance framework, and the importance of diversity within corporate governance.

What are the consequences of failing to follow basic governance rules?

The Enron Scandal was caused by the failure of the Enron board to follow basic governance rules, leading to risky accounting principles, conflicting interest transactions, undisclosed off the book activities, and excessive executive compensation.