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picture1_Powerpoint Templates For Corporate Presentations 42963 | 37176832


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File: Powerpoint Templates For Corporate Presentations 42963 | 37176832
corporate governance and capital markets source a mckinsey survey of global investors 2 what went wrong in the recent past environment loss of moral fibre of corporations business environment characterized ...

icon picture PPT Filetype Power Point PPT | Posted on 16 Aug 2022 | 3 years ago
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    Corporate Governance and Capital Markets
     Source: A McKinsey Survey of Global Investors
                                                        2
                               
     What went wrong in the recent past?
    » Environment
       » Loss of moral fibre of corporations
       » Business environment characterized by need to compete with the new 
         economy
    » Boards
       » Fundamental weaknesses in business models sought to be compensated 
         by adoption of aggressive accounting practices 
       » Ignored ethics and value systems when a much hyped business strategy 
         failed to deliver as expected and articulated to Wall Street
       » Incompetence of board members and overriding of audit committees 
    » Managements
       » Stock option heavy compensation structures
       » Bonus linked to short-term revenue growth, EPS and stock price
       » An inability to accept failure
       » Excessive focus on beating the street
                                                                    3
                                     
     What went wrong in the recent past ?
     » Auditors
        » Aggressive interpretation of accounting standards
        » Independence compromised to obtain lucrative consulting assignments
     » Employees
        » Compensation linked to stock-price movement
        » Large disparity between the highest and lowest paid employee
        » Culture of greed promoted within the organization by management
        » Manipulative accounting practices
     » Analysts
        » Ever-greening of reports with an eye on investment banking assignments
        » Pressurized managements to beat quarterly estimates
     » Investors
        » Short term focus of investors
                                                                           4
                                         
     Global Reactions
     » Regulatory reactions
        » SOX
        » NYSE/NASDAQ Rules
        » Clause 49 of listing agreement in India
     » Corporate reactions
        » Focus on fundamentals of business models
        » Focus on strengthening internal controls and information systems
        » Stock options 
        » Enhanced disclosures in MD&A and Annual Reports
        » Guidance
        » Focus on critical accounting policies
     » Aggressive journalism
        » Accounting/Governance was the main story for months
     » Glorification of the whistleblower
        » Time Magazine’s Person of the Year
                                                                           5
                                         
     Key Themes of Current Reforms
     » Independent directors and audit committees have enlarged responsibilities
     » Stricter independence standards for audit committees
     » Enhanced role of the whistle blower
     » Board effectiveness and integrity targeted by regulators, politicians and 
       the media
     » Compensation structures are under attack
     » New level of discipline brought to SEC reporting and under Clause 49
        » CEO/CFO certifications
        » Improvement in processes as effectiveness of internal controls need to be 
         certified
        » Improved processes and controls have connected the board to the day to day 
         functioning of the company
     » Real time disclosure and shortened deadlines 
     » Auditor independence 
     » Repeal of self regulation for the auditing profession
     » Analyzing the analysts
                                                                          6
                                         
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...Corporate governance and capital markets source a mckinsey survey of global investors what went wrong in the recent past environment loss moral fibre corporations business characterized by need to compete with new economy boards fundamental weaknesses models sought be compensated adoption aggressive accounting practices ignored ethics value systems when much hyped strategy failed deliver as expected articulated wall street incompetence board members overriding audit committees managements stock option heavy compensation structures bonus linked short term revenue growth eps price an inability accept failure excessive focus on beating auditors interpretation standards independence compromised obtain lucrative consulting assignments employees movement large disparity between highest lowest paid employee culture greed promoted within organization management manipulative analysts ever greening reports eye investment banking pressurized beat quarterly estimates reactions regulatory sox nyse ...

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