Approaches to corporate governance
In this lesson, you'll learn the two fundamental approaches to corporate governance — rules-based and principles-based — and understand when and why each is used.
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In this lesson
- 0:00 Lesson four governance scope and approaches
- 0:55 Rules based versus principles based approaches
- 2:15 Rules based approach advantages and disadvantages
- 3:56 Principles based approach advantages and disadvantages
- 5:07 Comply or explain principle in practice
About this lesson
You'll explore the key advantages and disadvantages of each approach, including how rules-based systems provide clarity and consistency but lack flexibility, while principles-based systems offer adaptability but can lead to inconsistency. The lesson also introduces the "comply or explain" principle, which is central to how principles-based governance works in practice. This knowledge is essential for SBL, where you'll need to apply governance concepts to fictional organisations and demonstrate understanding of how different governance frameworks operate globally.
Duration: 7m
Transcript
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