Governance and Ethics – KASNEB Syllabus

PAPER NO. 15 GOVERNANCE AND ETHICS

GENERAL OBJECTIVE

This paper is intended to equip the candidate with the knowledge, skills and attitudes that will enable him/her to practice good governance and comply with ethical principles.

LEARNING OUTCOMES

A candidate who passes this paper should be able to:

• Apply leadership principles in the context of good governance and ethics
• Explain the tenets and principles of good governance and ethics
• Describe the role and functions of the board of directors
• Demonstrate adherence to ethical principles in the organisation
• Understand the best practices required to be adopted in good governance

CONTENT

Introduction

• Definition of governance and ethics
• Importance of governance and ethics
• Principles of good governance
• Types of governance
• Evolution of corporate governance

Theories of governance and ethics

• Agency theory
• Stewardship theory
• Stakeholder theory
• Resource dependence theory
• Legitimacy theory
• Political theory
• Transaction cost theory
• Deontology theory (consequence based)
• Utilitarianism theories (duty based)
• Rights theory (contract based)
• Virtues Theory (character based)

Board governance models

Nonprofit governance models

• Advisory board
• Patron governance model
• Cooperative model
• Management team model
• Policy board model
• Fund raising board model

Corporate governance models

• Traditional Model
• Carver board model
• Cortex board model
• Consensus board model
• Competency board model

Family owned businesses

Independent offices and constitutional commissions

The Board of Directors

• Appointment, composition and size
• Role and functions
• The Role of the Chairperson
• Executive, non-executive and independent directors
• Committees of the Board
• Board meetings
• Board work plan
• Board induction and continuous skills development
• Board manual and charter
• Board performance evaluation
• Board remuneration
• Term limits for non-executive Board members
• Succession planning
• Liability and insurance indemnity
• Appointment of the Chief Executive Officer
• Appointment of the Certified Secretary
• Separation of roles
• Role of the Board in performance management

Accountability, risk management and internal control

• Financial reporting
• Integrated reporting
• Strategies and processes in enterprise risk management
• Board’s role in enterprise risk management
• Internal controls
• Internal auditor
• Audit Committee
• External auditor
• Internal audit charter and work plan
• Procurement process

Sustainability and social investment

• Sustainability goals and strategy
• Triple bottom line
• Social responsibility investments
• Corporate social responsibility
• Environmental management
• Ethical issues in CSR
• Strategies and policies on CSR
• Creating and registering foundations to manage CSR
• The impact of CSR on shareholder value
• Social audit
• Corporate reputation and image

Ethics and corporate disclosure

• Ethical norms, morality, values and ethical culture
• Role of the board in promotion of ethical conduct
• Professional judgement
• Code of ethics
• Standards of conduct and personal integrity
• Ethical dilemmas
• Ethics committee
• Ethics training
• Conflict of interest and related party transactions
• Insider trading
• Policy and guidelines on payments and gifts
• Corporate disclosure policy and strategy
• Benefits of disclosures and transparency
• Disclosure barriers
• Financial and non-financial disclosures
• Whistle blowing

Stakeholders management

• Stakeholder groups
• Shareholders and stakeholder rights and interests
• Shareholders and stakeholder obligations
• Minority shareholders
• Stakeholders engagement
• Stakeholders dispute resolution
• Shareholders association and education
• The Role of institutional investors in corporate governance
• Institutional investors’ relationship with investee companies

Compliance with laws and regulations

• Overview of the legal and regulatory framework on governance and ethics in Kenya
• Constitutional provisions on governance and ethics
• Compliance strategy
• Legal and compliance audit
• Role of ICS in promotion of governance and ethics
• Role of ICPAK in financial governance
• Role of Ethics and Anti-Corruption Commission
• Role of CMA, NSE and SCAC in promotion of governance and ethics

Contemporary issues in governance and ethics

• Convergence of corporate governance
• Role of ICT
• Virtual organisations/cyber company model
• Governance audit

Case studies in governance and ethics

Emerging issues and trends