Problem 1: Assess the benefits of the separation of the roles of chief executive and chairman. Would separating these roles contribute to higher accountability to shareholders?
Problem 2: On what circumstances do the contributions of independent directors to good corporate governance practices in public corporation's director's appointments arise? Explain ONE (1) of the circumstances by giving the example
Problem 3: We believe that it is important for director's reward to be performance -related. Moreover, we expect excellent performance in both short and the long term. So we calculate bonuses on the annual profits then we have a parallel 3-year scheme which rewards directors if EPS grows by 30% over that period"
Comment on the above phrase. What is the challenge faced by a company in determining directors' remuneration?
Problem 4: Mr. Daniel has been a director for Air Hitam Berhad for 5 years. He has not hold any directorship in any other company. He is now 50 years old. Recently, he was charged with corporate fraud. His case is still in the court hearing and yet to be verdicted. However, due to the case, the substantial shareholders of the company which is Valiguard investment group has passed the resolution to remove him from the board of directors. Is the decision valid? Justify your argument.
Problem 5: You are the audit manager in the audit firm of Arinson Audit and Partners. One of your audit clients is Abidas Sporty Corporation, a company specializing in the manufacture and supply of sporting equipment. Arinson Audit has been the only external auditor since the establishment of Abidas. As a result, you develop a close relationship with the top management of Abidas. Besides, one of your audit staff has become a member of the finance staff association in Abidas Sporty. Explain THREE (3) weaknesses identified in the above case with regards to complying with the principles of effective audit and risk management as outlined by Malaysia Code of Corporate Governance (MCCG) (any year).