In modern Corporate life, questions of ethical conduct are always being raised, and into this area will always fall Corporate Governance.
Corporate governance refers to the system by which companies and corporations are directed and controlled. The governance structure specifies the distribution of rights and responsibilities among different stakeholders (eg the board of directors, managers, shareholders, creditors, auditors, regulators, and others) and specifies the rules and procedures for making decisions in corporate affairs. Governance provides the structure through which corporations set and pursue their objectives, while reflecting the context of the social, regulatory and market environment. Governance is a mechanism for monitoring the actions, policies and decisions of corporations.
Contemporary principles of corporate governance are largely prescribed by three documents: The Cadbury Report (UK, 1992), the Principles of Corporate Governance (OECD, 1998 and 2004), and the Sarbanes-Oxley Act of 2002 (US, 2002). The Cadbury and OECD reports describe basic principles around which businesses are expected to operate to assure proper governance. The Sarbanes-Oxley Act, informally referred to as Sarbox or Sox, is an attempt by the United States federal government to put into law certain of the principles recommended in the Cadbury and OECD reports.
The Corporate Governance policy adopted and administered by AAM is contained in a document which is available on application. In accordance with the Combined Code the Company is headed by an effective Board which is collectively responsible for promoting the success of the Company. The Board sets the Company’s strategic aims, its values and standards, and ensure that its obligations to its shareholders and others are understood and met. All Directors are expected to bring an independent judgement to bear, and to take decisions objectively in the interests of the Company. If directors have concerns about the way the Company is being run or about any course of action that is proposed, they must ensure that such concerns are recorded in the board minutes if they cannot be resolved. Non-executive directors are expected to constructively challenge and contribute to the development of strategy, to scrutinise management performance, to satisfy themselves on the integrity of financial information and that financial controls and risk management systems are robust and defensible. It is expected that the non-executive directors will hold separate meetings without executive directors or chairman present. The scope of their responsibilities is enlarging, and non-executive directors will have to undertake that they have sufficient time to fulfil the role, and must disclose any other commitments or future new appointments. New Directors to the board receive a detailed induction pack on appointment, and are advised to regularly update and refresh their skills and knowledge. This includes skills and knowledge that they need to bring to their role, as well as matters relating to the Company itself.