Explain the different controls of public corporations?

Public corporations are typically controlled by a board of directors, management team, and shareholders.

1. Board of Directors: The board of directors is responsible for overseeing the overall direction and strategy of the corporation. They are elected by the shareholders and are typically composed of a mix of independent directors and executives from the company. The board of directors is responsible for making important decisions, such as hiring and firing the CEO, approving major investments or acquisitions, and setting executive compensation.

2. Management Team: The management team, led by the CEO, is responsible for implementing the strategy set by the board of directors. They are responsible for day-to-day operations, financial management, and ensuring that the company is meeting its goals and objectives. The management team reports to the board of directors and is accountable to shareholders for the company's performance.

3. Shareholders: Shareholders are the owners of the company and have the ultimate control over the corporation. They have the right to vote on important matters, such as electing the board of directors, approving major decisions, and changes to the company's bylaws. Shareholders also have the right to receive dividends and attend annual meetings where they can voice their opinions and concerns.

Overall, the controls of public corporations are designed to ensure that the company is being managed in the best interests of its shareholders and stakeholders. By having a system of checks and balances in place, public corporations can operate transparently and be held accountable for their actions.

Internal Controls

- Board of Directors: Oversees the corporation's operations, sets policies, and ensures compliance with regulations.
- Management: Implement policies, manage operations, and provide financial reporting.
- Internal Audit: Independent function that reviews internal controls and reports on their effectiveness.
- Compliance Function: Monitors and enforces compliance with laws, regulations, and company policies.
- Risk Management: Identifies, assesses, and mitigates potential risks that could impact the corporation.

External Controls

- External Auditors: Independent professionals who provide assurance on the accuracy and fairness of financial statements.
- Regulatory Agencies: Government bodies that regulate specific industries or aspects of corporate activity (e.g., SEC, FTC, IRS).
- Shareholders: Owners of the corporation who have voting rights and can influence management decisions.
- Creditors: Lenders who provide financing to the corporation and have a vested interest in its financial health.
- Market Forces: Competition and other market conditions that influence corporate behavior.

Other Controls

- Codes of Conduct: Ethical guidelines that outline expected behavior for employees.
- Whistleblowing Procedures: Mechanisms for employees to report suspected wrongdoing or unethical conduct.
- Independent Directors: Board members who are not affiliated with management or major shareholders, providing an independent perspective.
- Proxy Voting: Shareholders can vote on important issues by proxy, enabling them to exert influence even when they cannot attend meetings.
- Corporate Governance Best Practices: Voluntary guidelines and standards aimed at promoting ethical and responsible corporate behavior.