MIDLANDS STATE UNIVERSITY
FACULTY OF BUSINESS SCIENCES
DEPARTMENT OF MANAGEMENT SCIENCES
MODULE OUTLINE: INTRODUCTION TO CORPORATE GOVERNANCE AND ETHICS
(BM439/408, ACC245/LSC435)
Module Overview:
The value of a firm depends on good corporate governance practices; greater protection of
shareholders lowers the cost of capital due to better risk mitigation. Thus, the set of governance
practices, rules, and regulations that promote private sector investment and jobs creation also promote
firm value. Topics include the role and responsibilities of shareholders (principals), the boards of
directors (the principals' representatives), and the executive management (agent). It also covers
executive compensation policies, boardroom structure and practices, corporate disclosure and
transparency, and the value of the shareholder vote. The course looks into corporate pyramidal
structures, and the failure of the market for corporate control. It examines the role of financial
institutions and credit rating agencies in promoting corporate governance, and how transparency,
accountability, responsibility, and fair and equitable treatment of all shareholders help improve
corporate governance and reduce agency conflicts between principals, management, and the board of
directors.
Learning Objectives
Students are expected to develop
Familiarization with the corporate governance framework prevailing in the developed countries
(OECD model) and World Bank guide lines for developing countries, and the ZimCode
Understanding of the state (Governments) and its regulatory mechanism requirements, code,
functional linkages and corporate responsibilities to meet its obligations.
In-depth knowledge relating the role of corporation / business Organizations in the era of
globalization and international economic integration of business, trade and industry thus
creating an efficient, reliable and transparentcorporate linkages with national, multinational
and international corporations, regulatory bodies and Financial Institutions.
Learning Methodology
The course is subjective in nature and various techniques and methods are utilized to transfer
academic knowledge in class room environment through:
- Lectures (Organized in Lecture plans delivered through presentations)
- Class room discussion, question / Answer sessions during lectures.
- Examples of corporate Governance models recommended by OECD, world Bank, and
other worldwide institutions relating Business, Trade, Industry and Commerce.
- Applied research articles, case studies are integral part of knowledge sharing in class room
environment.
- Assignments enabling participants to critically evaluate, review and suggest alternate /
innovative methods to address special topics during the semester.
- Seminar and Guest Speaker session from Corporate World.
Assessments
Continuous assessment 30%
Final examination 70%
Total 100%
1. Definition, History and Concepts of corporate Governance
Definitions of corporate governance, company and business
History of corporate governance
Corporate Governance in USA,UK (the Codes)
Core principles/concepts of corporate governance
2. Directors legal powers, rights and duties
Directors
The duties of directors
Fiduciary duties of directors
Duty of skill and care
Director’s liability insurance
Fair dealing
Legal responsibilities
Other types of directors
3. Board
The role of the Board and Corporate Governance Issues
Size and balance of the Board
The Board and Decision making
The roles of chairman and chief Executive Officer
Non- Executive Directors
Board appointments
Induction and Training
Performance Evaluation
Types of Boards
4. Corporate Social Responsibility
History of CSR
CSR Triple Bottom line
Views for and against CSR
5. Financial Reporting,
Financial Reporting and Auditing
Financial Reporting and corporate Governance
The role of external auditors
Auditor independence
Controls over the audit profession
Financial Reporting
Audit committee
6. Risk Management and Corporate governance
The nature of Risk
Internal control system
The role of internal audit
Risk management
The role of Board
The Board’s Statement
7. Theories in Corporate Governance
Agency Theory
Resource Dependency Theory
Stakeholder Theory
Stewardship Theory
Ubuntu Theory
8. Ethics in Corporate Governance
Ethical Theories
Reporting Ethics
Business Ethics
Texts and Other Readings Sources
1. Prescribed Text: Singh S. (2005), Corporate Governance: Global Concepts and Practices,
Excel Books.
2. Prasad, K. (2009), Corporate Governance, PHI Learning-New Delhi.
3. Coyle, B. (2004), Corporate Governance, 4th Edition, ICSA Publication.
4. Bhatia S.K, Business Ethics and Corporate Governance, Deep and Deep Publications.
5. John L. Colley, JR etal, (2003), Corporate Governance, McGraw-Hill.
6. Chambers A. (2002), Tolley’s Corporate Governance Handbook.
7. Christine A. Mallin, (2009) Corporate Governance 4TH Edition, Oxford University Press,USA.
8. Rossouw D, van Vuuren L, (2007), Business Ethics, 3rdEdition,Oxford University Press
Southern Africa.
9. Fernando. A. C (Latest Edition), Corporate GovernancePrinciples, Policies and Practices
Other Important Readings
10. Public Entities Corporate Governance Act (2018)
11. National Code on Corporate Governance Zimbabwe (2014)
12. Companies and other business entities act (24:31)
13. Zimbabwe Stock Exchange Listing Requirements
14. Bank Licensing, supervision and surveillance, Guidelines 01-2004/BSD and 02-2004/BSD
15. King 4 Report of South Africa (2016)
16. UK Code on Corporate Governance- (June 2010)
17. UK Stewardship Code- (August 2010)
18. Framework for Corporate Governance for State Owned Enterprises and Parastatals-Zimbabwe
Recommended Journals
- Journal of Corporate Governance (UK)
- Corporate Governance Review
- Corporate Governance and International Review (UK)
- International Journal of Corporate Governance (UK)
- International Journal of Disclosure and Governance (UK)
Other Sources of Information (Websites)
- World Bank
- International Monetary Fund (IMF)
- World Council for corporate Governance
- Global Corporate Governance Forum (GCGF)
- OECD = Principles of Corporate Governance
- EBRD (European Bank for Reconstruction and Development)
- American Law Institute, ALI principles of Corporate Governance
