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07:27
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And that’s the key problem in a nutshell. Ceteris paribus, I wonder if there are some key lessons from the collapse of One Tel that may well be applicable:
First, strong internal controls, financial reporting quality, audit quality, effective management scrutiny, full disclosure of company affairs to the board, and a strong link between executive pay and firm performance are vital for effective corporate governance of a firm. Second, a board is less likely to detect firm problems when there is a dominant CEO in the firm. Third, non-executive board members should make their own enquiries into firm strategies and performance. Hence, non-executive members should be given access to middle and lower management to ensure transparency of information. Third, large investors in any firm must take an active interest in managing the firm. Fourth, as already documented in the literature, auditor’s involvement in the non-audit service may compromise audit quality. Fifth, the board chair should always preside over the board meetings to control the board's agenda and to effectively monitor management behaviour.
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https://research-repository.griffith.edu.au/bitstream/handle/10072/42673/74746_1.pdf
