Accountability

The requirement for a person in a position of responsibility to justify, explain or account for the exercise of their authority and their performance or actions.

Audit

An independent review conducted by auditors of an organization’s financial statements, internal financial, operational and compliance controls and risk management systems.

By-laws

Also known as “bye-laws”, a set of documented rules that dictates how an organization governs itself. 

Charter

Also known as “terms of reference”, this prescribes the principal aspects of the organization’s corporate governance. Charters may be established for the governing body itself and for its standing committees and should include inter alia its purpose, composition, responsibilities and levels of authority.

Chairperson

The leader of the governing body.

Collective responsibility

This is a principle by which the individual members of a group are responsible for the actions of the group as a whole.

Comply or explain

The requirement for an organization to comply with a voluntary code of corporate governance or explain any areas of non-compliance.

Constitution

The collection of an organization’s internal rules that governs it. It may include the organization’s articles of incorporation, by-laws and charters.

Corporate Secretary

The secretary of the organization appointed by the governing body. Also referred to as “the company secretary”, the corporate secretary is the governing body’s governance advisor, communication conduit between the members of the governing body and management and key advisor on corporate governance practices for the organization.

Disclosure

This refers to information about the organization that is made publicly available. Information may include audited annual financial statements and annual reports. Publicly listed companies that trade on a recognized stock exchange are required to make certain disclosures via their annual report.

Diversity

This refers to the range of differences among members of the governing body that allow for varied views and perspectives. It typically includes varied ages, ethnicities, genders, attributes, skills, qualifications, experiences, backgrounds and levels of independence.

Emotional intelligence

This is also referred to as one’s “emotional quotient (EQ)” and one’s ability to assess, recognize, understand and manage one’s own emotions and the emotions of others. Leaders who are emotionally intelligent facilitate an atmosphere of empathy, trust, transparency and accountability.

ESG

This is an acronym for the Environmental, Social and Governance aspects of how an organization operates. Recent trends require organizations to take these factors into account to prevent a disproportionate focus on profit generation.

Ethics

This refers to standards of behaviour that reflect what is good, right and just. It can include actions that promote selflessness for the greater good and protection of the vulnerable.

Executive Director

A member of the governing body who has executive responsibilities in the organization’s management structure. Usually, a full-time employee with a contract of employment or service.

Fairness

This refers to impartiality or lack of bias. In a corporate goverance context, the quality of fairness refers to things that are done or decided in a reasonable manner and with a sense of justice, while avoiding partiality.

Governing Body

This refers to the body of persons charged with the responsibility of governing the organization. It may be referred to as “the Board” or in some non-profit organizations, “the Council”.

Governing Body member

This is a member of the body of persons charged with the responsibility of governing the organization. May also be referred to as “a director”, “a councillor” or “governor”.

Independence

This refers to the state of being uninfluenced by factors such as business, professional and/or personal relationships, shareholdings and overall familiarity with the organization not in keeping with the best interests of the organization.

Independent non-executive governing body member

This is a member of the governing body who does not have any responsibilities within the organization as an executive manager or employee and who satisfies the organization’s criteria for independence as defined by the organization’s policy or by law.

Induction

This refers to the process of introducing a newly-appointed member of the governing body into his/her role, by providing appropriate information, site visits, meetings with management and (where necessary) training.

Integrity

This refers to the quality of being honest and having strong moral and ethical principles.

Non-Executive governing body member

This is a member of the governing body who does not have any responsibilities within the organization as an executive manager or employee.

Owner

Also known as “shareholder”, “beneficial owner” and “member”; this is an individual or institution who/which is entered on an organization’s register of owners/members, as the case may be. The governing body accounts to the owner(s) on how it has been running the organization.

Share options

These are rights given to an individual or institution giving him/her/it the right, but not the obligation, to buy new shares in the organization at a certain price and within a specified period.

Share awards

These are rights granted to an individual, typically an employee, to acquire a specified number of shares without any payment. Individuals can become shareholders immediately or at some time in the future depending on the conditions of the award.

Stakeholders

Refers to an indentifiable group of individuals or organizations with a vested interest in the organization. Stakeholder groups usually include owners, the members of the governing body, senior executive managers, employees, trade unions, suppliers, regulators and the community at large.

Sustainability

This refers to conducting business operations in a way that can be continued into the foreseeable future, without using natural resources at such a rate or creating such environmental damage that the viability of the organization is threatened.

Transparency

This refers to an organization being open and honest about historial performance, present conditions and future intention, without trying to suppress material information.