Please read Chapter 5 and answer the following questions based on your understanding of the chapter.

1. A. Define corporate governance and identify its 3 major parties.

B. Define each term and explain the role of each in an organization's corporate governance:

• Board of directors
• Audit committee
• Compensation committee
• Corporate governance committee

1. Please answer the following questions:
   1. What are the six steps to effective corporate governance?
   2. Select your top 5 from Walter Salmon's "22 Questions for Diagnosing Your Board" (page 94) and explain/defend why you picked these 5 over the other ones.
   3. Read the paragraphs under the title" The Dangers of a Corporate Governance Checklist" (page 97) state 4 important flaws in Enron's corporate governance.
   4. Provide three examples of evidence that good governance pays off in organizations.