- Independent board member
- Take care of stakeholder and debt holder
- CEO not the head and introduce CRO
- Agency risk
- Focus on economic performance instead of accounting performance
- Compensation based on risk adjusted return
Best practices:
Board of directors
oversee:
- Policies, reports, strategy, control , audit, practics
Risk appetite ->
tolerance/willingness a firm can take risk.
Transmitted by risk
director and audit committee
Audit main role:
make sure financial statement and regulatory report correct. Also oversee risk
and so on
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