Saturday 30 January 2021

CORPORATE GOVERNANCE BUSINESS VOCABULARY IN USE (ADVANCED)

 

BUSINESS VOCABULARY IN USE (ADVANCED)

44. CORPORATE GOVERNANCE

 

A

Board organization

Corporate governance is the way a company is organized and managed at the highest level. This can have a critical influence on the company’s performance and behaviour. A company’s board of directors includes:

executive directors: the chief executive and other senior managers such as the finance director.

non-executive directors or non-execs: outsiders with management experience who are invited to sit on the board, bringing their expertise and an outside view. Large investors in the company like pension funds may also have seats on the board so that they can influence how the company is run.


B

Separation of roles

Another key issue in corporate governance is whether the most senior job in a company should be split into two or not. Should the roles of chairman/chairwoman and chief executive be held by one person, or should there be a separation of these two roles?


C

Rewards for success (and failure)


Also important are executive remuneration or compensation. Top executives are rewarded for success in the form of high salaries and share options (BrE) or stock options (AmE): the chance to buy shares in the company cheaply. These highly-paid executives are often called fat cats by their critics. Executives say in their defence that share options are one of the incentives that can make them perform better.


EXERCISES

44.1

Two articles have been mixed up. They contain expressions from A, B and C opposite. Which paragraphs make up each article? (The paragraphs are in the correct order. Article 1 contains four paragraphs; the first is a. Article 2 contains four paragraphs; the first is B.


 


ANSWER KEY


 

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