What Is The Composition Of Retail Plc's Main Board And Audit Committee

There are three internal and one external governance mechanisms used for owners to govern managers to ensure they comply with their responsibility to satisfy stakeholders and shareholder’s needs. First, ownership concentration is stated as the number of large-block shareholders and the total percentage of the shares they own (Hitt, Ireland, Hoskisson, 2017, p. 317). Second, the board of directors which are elected by the shareholders. Their primary duty is to act in the owner’s best interest and to monitor and control the businesses top-level managers (Hitt, Ireland, Hoskisson, 2017, p. 319). Third, is the

Presently, corporate governance is an evolving concept as such there is no fixed definition. However, corporate governance has been defined as, “the system by which companies are directed and controlled.” (The Report of the Cadbury Committee on The Financial Aspects of Corporate Governance: The Code of Best Practice 1993)

1. Does the board comprise a majority of independent directors? Ensuring that a majority of independent directors to monitor the actions of executive directors helps to address the potential for, or perception of, conflict of interest of executive director involvement in board decisions. A good corporate governance structure would encourage the board to regularly assess whether each non-executive director is independent.

To the extent of prevention of corporate failure, I argue that three ASX principles and recommendations could halt the demise of Dick Smith. Firstly, the 2nd principle which is “Structure the board to add value” by structuring the board with a majority of independent directors would prevent CEO dominance because some suggest that independent outside directors can reduce the influence of dominant individuals (ASX, 2014, p. 17). In accordance with Gallagher and Bennie (2015, p. 20), the independent directors are likely to focus on the company’s objectives and not to make decision relying on others. Furthermore, an addressing of independent directors would reduce the reliance on management, and create the effectiveness on monitoring (Dechow et al. 1996 cited in Christensen, Kent, and Stewart (2010)), as well as capability to lessen the conflict of interest between managers and shareholders (Hardjo & Alireza, 2012, p. 4). Thus, DSE’s board would be more active to monitor the CEO’s performances because independent directors pay attentions to the interest of company (Gallagher & Bennie, 2015, p. 20) and shareholders (Hardjo & Alireza, 2012, p. 4)

The article is written to help readers gain a solid understanding the roles of corporate governance, both inside and outside the company. Its goal is simply to impart information, not make claims or arguments on its own. I will be judging it mainly on the sources gathered, numerous examples and explanations given and the overall effectiveness it possesses in effectively communicating its ideas.

This was a very interesting article, in my opinion it brings to mind the derived phrase, which came first the chicken or the egg. Meaning, is corporate governance an attempt to control the results of unethical practices of corporations or is it meant to deter them. In reading this article, it is clear that certain corporations practiced unethical business behaviors for self-interest, but the questions this author have are: 1. Should corporate governance be regulated by the legislature as well as the organization and to what degree, 2. Is corporate governance, there to protect the shareholder or the stakeholder, 3. How effective is corporate governance on a global level. The need for a governance system is based on the assumption that the separation between the owners of a company and its management provides self-interest executives the opportunity to take actions that benefit themselves, with the cost of these actions borne by the owners (Larcker & Tayan, 2008).

I had reviewed companies must have corporate governance committee combined entirely of independent directors together. In addition to, identifying individuals qualified to become board members, develops and recommends to the board has arranged of corporate governance principles and applied to the company as following;

A director is obligated to place himself or herself to manage the company . The director must understand the business of the company and the effect that the decisions of the board has on the company. Where the decisions of the company rely on expert or professional advice, then the directors of the company can reply on such advice. There has been a series of cases, which examine

This report is considered as the Megna Carta of Corporate Governance. The Committee was set up in May 1991 by the financial reporting council of the London Stock Exchange and the accountancy profession to the address the financial aspect of corporate governance. There was unexpected failure of the major companies like world com. Xerox, Enron etc. Moreover there was heavy criticism by the investors media and the general public of the lack of effective board accountability in respect of these massive failures. Further, there was a huge demand by these agencies to take penal action against the directors and management and also to clarify the responsibilities. The Cadbury committee drew on these documents and wide range of submissions from interested parties in producing its draft report that was issued for public comments on 27 may 1992. The code recommendation consists of 19 points set out under the heading of (1) Board of Directors (2) Non-Executive Director (3) Executive Director (4) Reporting and Control. The main points are summarized as follows:

Good Corporate Governance suggest that there must be a balance between executive and non executive directors.

To be able to look more closely at what makes a balanced board, it is important to review its purpose and responsibilities. The UK Corporate Governance code states that the board is taking the “ultimate responsibility for the impact of the company on others”. It has a duty towards their Shareholders, as they own the company and entrust its direction and control to the board of directors. The board’s responsibilities include, but are not limited to setting the bank’s strategy, reviewing and approving a bank’s financial statements, the approval of communications that go out to shareholders and the press. Furthermore, the board looks at appointing and the removal of external auditors, confirming changes in

They must continuously review the performance of the chief executive to ensure that managerial actions are in line with shareholders wishes and given that they are accountable to the former, they have to report to them about the overall organisational performance. Regarding their duty of loyalty, directors must prevent conflict of interest by avoiding transactions which may generate a potential conflict; those transactions according to Professor Bernard S. Black of Standford Law School in an article entitled The principal Fiduciary Duties of Boards of Directors are called “ self-dealing “ transactions. Representing at the same time the boss to one extend and the subordinate to another extend, directors must make sure never to act in ways that will harm either the shareholders or the executives, treat both parties with care and respect and try to make good decisions i.e. that will compromise none of the parties, but which will be profitable to the firm. Also, board members have the duty to keep private all dealings, matters and information from the board meeting and the company in order to avoid the disclosure or misuse of information which may lead to a conflict. From the study of board members duties, we can state that companies’ corporate governance rests mostly on their shoulders. So, when effective, it permits the realisation of corporate objectives, risk management, the reduction of agency problems and an increase in the value of the

The Corporate Governance refers to the mechanisms, rules and regulations in which companies and governing bodies are put into task on various occurrences under their performance. It can be said to be a guideline which directs how companies achieve their objectives and more so how these objectives are set. In this case, abiding to the ASX corporate Governance Council has its merits and limitations at the same time. By abiding to the principle of laying solid foundations for the oversight and management, the merits in this case is the separation and clear allocation of duties to both junior staff and directors or seniors (Swan, 2014). By this there will be minimal conflicts and misunderstanding in execution of the duties by different players. However, by disclosing the process and manner in which the senior executives are evaluated, this can lead to the compromise of the whole process since the senior executives based on their vast knowledge may influence the outcome skewing the results to be positive.

It is crucial that a board of both executive and non-executive directors manage a UK pubic company. It is their job to make sure that all responsibilities are delegated equally between the chairman and the chief executive in order to run the business efficiently. Also, such responsibilities must be given in well-mannered way and must provide good quality information. “Every company should be headed by an effective board which is collectively responsible for the long-term success of the company” (Financial Reporting Council, 2014). This means that a company’s board can influence the performance, they should be effective in terms of their decisions and any decisions they are making should benefit the company. Moreover the chairman must ensure that the information given to directors is correct, appropriate and must provide a clear sense of direction. Similarly, he/she is accountable for communicating with the shareholders and this communication is important, as the chairman should know the interests of their shareholders.

As for the relationship between listed companies and investors, this, too, was arm’s length in character. Boards of directors exercised considerable discretion over the assets at their disposal, subject to a series of Companies Acts which were designed to protect investors against fraud.