Advantages Of The Enterprise And Regulatory Reform

The board carries out the duties in regard to the interest of the companies’ shareholders, staff,

1. Financial Publics: The Company’s Board of Directors, which is elected by the stockholders, is the ultimate decision-making body of the Company, except with respect to matters reserved to the stockholders. The Board selects the Chief Executive Officer and other senior executives of the Company, who are charged with directing the Company’s business. The primary function of the Board is oversight—defining and enforcing standards of accountability that enable executive management to execute their responsibilities fully and

Common stockholders are the basic owners of a corporation, but few stockholders of large corporations take an active role in management. Instead, they elect the corporation’s board of directors to represent their interests. Board members seldom get involved in the day-to-day management of the company. They establish the basic mission and goals of the corporation and appoint

In large corporations the success or failure of the company is the responsibility of the board of directors. According to Richard DeGeorge, “The members of the board are responsible to the shareholders for the selection of honest, effective managers, and especially for the selection for the CEO and of the president of the corporation.” (p. 202). The board members have a moral responsibility to ensure the corporation is run honestly, in respect to its major policies, and to ensure the interests of the shareholders are satisfied. The next responsibility within a corporation is the responsibility management has to its board of directors. DeGeorge writes, “It must inform the board of its actions, the decisions it makes or the decisions to be made, the financial condition of the firm, its successes and failures, and the like.” (p. 202). The management of the corporation is morally obligated to

* The roles and responsibilities of the board of directors in corporate governance and the way the board affects a company’s operation.

Joshua Kennon (2007), stated that “The board of directors is the highest governing authority within the management structure at any publicly traded company and is usually made up of the directors who are elected for a specific number of years by the shareholders”. According to Wikipedia,” A board of directors is a body of elected or appointed members who jointly oversee the activities of a company or organization”.

Corporate governance lies at the heart of the way businesses are run. Of ten defined as the ‘way businesses are directed and controlled’, it concerns the work of the board as the body which bears ultimate responsibility for the business. Governance relates to how the board is constituted and how it performs its role. It encompasses issues of board

Companies hire directors to act on their behalf and manage the corporation based on their values and organisational culture. Directors are individuals who are appointed to act in the corporation’s best interest. They are given the responsibility to manage the company and also the authority to exercise power in order to run the organisation efficiently and effectively. There are some cases where shareholders may revoke

Shareholders of the company have ultimate control of the company. They can appoint and remove directors who run the business and are also responsible for its management of the company.

I-2) The role of the board of directors in a publicly traded company is to represent the stockholders and make decisions on major company issues.

As of October 2013 the ‘Enterprise and Regulatory Reform Bill’ was amended by parliament under the proposal of Vince Cable , the new powers gave shareholders a binding vote on executive compensation , this meant that any changes in executive pay required a 50% shareholders approval. Before this shareholders votes on such matters were advisory , this meant even if there was a vote against executive pay they could still be increased regardless. This is significant as it shows a change in peoples perception on the role of shareholders within a company and leads to the point if this is correct.

The Board of Directors is defined as “a group of elected individuals who serve as representatives of an organizations’ stockholders” (Root). They are the decision-making power over management related policies and fiduciary duties of the organization. They make decisions to fire or hire the executive leaders, conduct performance evaluations on the company’s leading executives, and ultimately decide the executive’s compensation, as well as dividends to be distributed to the shareholders. The Board of Directors determine the organization’s strategic direction, and make sure the company is operating under the principles of the law to ensure the organization is conducting itself ethically, legally, and with social and environmental responsibility (Bateman 267).

In accordance with business dictionary writes, "governing body (called the board) of an incorporated firm. Its members (directors) are elected normally by the subscribers (stockholders) of the firm (generally at an annual general meeting or AGM) to govern the firm and look after the subscribers ' interests". The responsibilities of the board of director firstly, defining the purposes and procedures, which are the part of the company 's strategy and compliance because the purpose encourages the company to reach the goals step-by-step. Secondly, the director should monitor the progress during an achievement of those purposes and procedures. Thirdly, senior management is also appointed, hired, monitored, evaluated and fired by the directors (the member of the board include senior called inside directors or executive directors. Fourthly, determining and paying the dividend. Lastly, responsible with the activities of the company that relevant many parties.

Ownership of a corporation is divided into shares is called Stock. The person who owns a stock is a shareholder. The major shareholders of the corporation elect board of directors. The shareholders would not have direct control because, in a corporation, direct control and ownership are often separate. Board of directors makes rules on how the corporation should run and delegates the decision making to corporate management team. The Corporate management team will consists of Chief executive officer (CEO) and Chief financial officer (CFO). The main important job of a financial managers is to make best decision to increase the value of the company which would increase the value of stock invested by the investors.

Corporate Governance refers to the way a corporation is governed. It is the technique by which companies are directed and managed. It means carrying the business as per the stakeholders’ desires. It is actually conducted by the board of Directors and the concerned committees for the company’s stakeholder’s benefit. It is all about balancing individual and societal goals, as well as, economic and social goals. Corporate Governance is the interaction between various participants (shareholders, board of directors, and company’s management) in shaping corporation’s performance and the way it is proceeding towards. The relationship between the owners and the managers in an organization must be healthy and there should be no conflict between the