Essay Business: Corporate Governance and Board

Submitted By SamAugustine
Words: 864
Pages: 4
Open Document
* | * Definition of 'Board Of Directors - B Of D'A group of individuals that are elected as, or elected to act as, representatives of the stockholders to establish corporate management related policies and to make decisions on major company issues. Such issues include the hiring/firing of executives, dividend policies, options policies and executive compensation. Every public company must have a board of directors. |
In an attempt to create a corporation where stockholders' interests are looked after, many firms have implemented a two-tier corporate hierarchy. On the first tier is the board of governors or directors: these individuals are elected by the shareholders of the corporation. On the second tier is the upper management: these individuals are hired by the board of directors. Let's begin by taking a closer look at the board of directors and what its members do.

Board of Directors
Elected by the shareholders, the board of directors is made up of two types of representatives. The first type involves individuals chosen from within the company. This can be a CEO, CFO, manager or any other person who works for the company on a daily basis. The other type of representative is chosen externally and is considered to be independent from the company. The role of the board is to monitor the managers of a corporation, acting as an advocate for stockholders. In essence, the board of directors tries to make sure that shareholders' interests are well served.

Board members can be divided into three categories: Chairman – Technically the leader of the corporation, the chairman of the board is responsible for running the board smoothly and effectively. His or her duties typically include maintaining strong communication with the chief executive officer and high-level executives, formulating the company's business strategy, representing management and the board to the general public and shareholders, and maintaining corporate integrity. A chairman is elected from the board of directors.

Inside Directors – These directors are responsible for approving high-level budgets prepared by upper management, implementing and monitoring business strategy, and approving core corporate initiatives and projects. Inside directors are either shareholders or high-level management from within the company. Inside directors help provide internal perspectives for other board members. These individuals are also referred to as executive directors if they are part of company's management team.

Outside Directors – While having the same responsibilities as the inside directors in determining strategic direction and corporate policy, outside directors are different in that they are not directly part of the management team. The purpose of having outside directors is to provide unbiased and impartial perspectives on issues brought to the board.

Management Team
As the other tier of the company, the management team is directly responsible for the day-to-day operations (and profitability) of the company.

Chief Executive Officer (CEO) – As the top manager, the CEO is typically responsible for the entire operations of the corporation and reports directly to the chairman and board of directors. It is the CEO's responsibility to implement board decisions and initiatives and to maintain the smooth operation of the firm, with the assistance of senior management. Often, the CEO will also be designated as the company's president and therefore also be one of the inside directors on the board (if not the chairman). (To learn about what CEOs
Show More

Related Documents: Essay Business: Corporate Governance and Board

Corporate Governance Essay example

Title: Corporate Governance Assignment topic Option 1 Conduct a review of the governance of your organisation (or one with which you are familiar) in the form of a report to the Chairman (or President) of the Governing Board of Directors. In the brief report use the concepts, tools and techniques learned in this subject to review the structure, process and effectiveness of the governance of the organisation and make recommendations for appropriate improvements. Executive summary This report…

Words 2495 - Pages 10

Effective corporate governance and efficient board structures will have a positive effect on long term share prices Essay

Online Assignment Submission Birmingham Business School Student ID Number: 1439329 Programme of Study: MSc International Business Module: Issues in Management 07 24242 Assignment Title: Issues in Management Essay Date and Time of Submission: 26.01.2015 11:00 Please ensure that…

Words 2460 - Pages 10

Essay on Acca Governance

CORPORATE GOVERNANCE sustainability briefing paper 4 in partnersHip WitH 1 CORPORATE GOVERNANCE A company that is well governed is one that is accountable and transparent to its shareholders and other stakeholders, such as employees, creditors, customers and society at large. Corporate governance is the means by which companies are directed, administered and controlled. it influences how the objectives of the company are set and achieved, how risk is monitored and assessed, and how…

Words 3627 - Pages 15

The Importance Of Corporate Governance

this essay is to recognize the importance of structuring the board to add value as well as establishing an effective risk management and internal control in corporate governance area, and to provide reasons why this area is of most importance in protecting corporate failure. To support the recognition and the reasons, theoretical analysis would be presented in this essay such as agency theory. In addition, the actual corporate governance practices of Australia and New Zealand Banking Group Limited…

Words 622 - Pages 3

Corporate Governance in Banking Sector of Bangladesh Essay

of the corporate governance into forefront of the policy discussions. In an increasingly deregulated policy environment, the big corporate failures have raised the need for implementing competent corporate governance practices. The recent financial crises in different countries have verified how the lack of good governance practices in the financial institutions can lead to a crisis in the system leaving long-term consequences to the. Among the financial institutions, the corporate governance…

Words 16145 - Pages 65

Corporate Governance Definition

"Corporate Governance: A true partnership between Managers, the Board and Shareholders", holds at its core the term 'partnership'. Partnership is defined by the Oxford dictionary as "an association between two of more people as partners". Partnerships create ideas around collaboration and cooperation, and it is in this context that the term is considered for this assignment. There are also many definitions of Corporate Governance and there does not appear to be any conclusive definition. The main…

Words 2288 - Pages 10

Essay on RBC Project

company 2 3.0 Governance 3 3.1Composition of its Board of Directors 3 3.2 Committee Structures 3 3.2.1 Audit Committee 3 3.2.2 Risk Committee 4 3.2.3 Corporate Governance and Public Policy Committee 5 3.2.4 Human Resources Committee 5 3.3 Major shareholders 6 3.4 Review of RBC’s Governance 6 4.0 Ethics and Social responsibility 6 4.1 Ethical and socially responsible 6 4.2 Negative ethical or social responsibility issues 7 5.0 Organization 8 5.1 Organizational Structure 8 5.2 RBC’s Corporate Culture 8…

Words 3001 - Pages 13

Corporate Governance Case Essay

“Models of Corporate Governance: Who’s the Fairest of Them All” Case Study Review Corporate governance systems vary around the world. Some focus on a link between the shareholder and the company, others on board structures and practices, and some on social responsibilities of a company. The main idea of corporate governance is a set of mechanisms used to manage the relationships and interests among stakeholders, and to determine a corporations direction and performance by aligning strategic decisions…

Words 480 - Pages 2

Abstract: Corporate Governance and Oxford University Press Essay

Question: Discuss the different methods of corporate governance of several countries Study Skills Project Peter Sin Student ID: B4000749 Table of Contents Abstract pg.3 Introduction pg.3-5 Literature Review pg.5 Hypothesis pg.5 Methodology pg.5-6 Results pg.6-9 Discussion pg.10-14 Conclusion pg.14 Reference pg.15-16 Bibliography…

Words 3628 - Pages 15

Critical Analysis of Reckitt Benckiser Corporate Governance Principles Essay

support with it but explained that it is still under consideration. FRC (2010) BOARD ORGANISATION AND EFFECTIVENESS The role of and matters reserved for the Board As required by the code, the board of Reckitt Benckiser confirmed responsibility for leadership and control of the organisation and is also in charge of strategy approval, supervision, advisory and ultimate responsibility for decision making. The board structure amongst other committees has an executive committee which is led by the…

Words 4038 - Pages 17