Corporate Governance Positions: The Board:

Role of the Board of Directors

 

Management Oversight

Position: A diversified and qualified board of directors that truly represents the interests of shareowners is best qualified to oversee and consider management actions and decisions.

Rationale: A qualified board of directors is able to balance the need to let management formulate business plans, enter into transactions and contracts on behalf of the company, and make relevant decisions.

Where stated: USAC on Director Nominations

 

Management’s Responsibility for Third Parties

Position: The board must hold management accountable when it directs outside parties to manipulate their inventory, alter records, or take other actions designed to mislead the company’s independent auditors.

Rationale: The board must hold management responsible for such actions because:

• the conveyance or withholding of information that intentionally skews the mix of information provided the auditors subverts the audit process and ultimately results in misleading financial statements

• while management may not be able to control the actions of individuals who are not employees, they should be held accountable for encouraging such individuals to mislead auditors.

Where stated: USAC - Improper Audit Influence

 

Internal Control Review

Position: Directors should regularly have to conduct reviews of the effectiveness of the company’s or group’s internal controls systems.

Rationale: Regular reviews performed on the board's behalf by independent third parties will focus board members’ attention on the issue and adequacy of internal controls.

Where stated: APAC - HKEx Listing Rules on CG