Essay on Flight of funds

5714 Words Nov 14th, 2013 23 Pages
QUESTION 1: Image you were a director of MTSB in 2006, what would be the steps you would taken to fulfill your fiduciary duties as a director.
The steps MTSB have taken to fulfill the fiduciary duties as a director according section 6 of Companies Act, fiduciary duties of a director.
Step 1 : Understanding about duties of director
To carry out your duties as a director well, it is necessary for you to be fully aware of the duties and responsibilities expected of directors. Directors are fiduciaries of the company which appoints them. A fiduciary is a person who is expected to act in the interests of another person.Hence, as a director, you have a duty to act in the way you honestly believe to be in the best interest and benefit of the
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Step 4 : Independence

The concept of “independence” has become very important in corporate governance. The meaning of independence has been defined in detail by regulations. These rules have become viewed as “best practice” in MTSB. For example, MTSB must have an audit committee consisting of at least three directors, all of whom are independent. Executive compensation and director nominations must be approved by either a committee of independent directors or a majority of the independent directors serving on the board. The independent directors must have regularly scheduled executive sessions at which only independent directors are present.

QUESTION 2: Since there have step should be taken to safeguard MTSB’s as management team therefore after investment also should have step to follow for safeguard MTSB’s investment.
Step 1: Be alert when auditors speak out about irregularities MTSB should be alert when auditors (Agoos Bagoos) speak out about MTT irregularities. It generally means the unauthorized use of assets especially in cash and investment. Negative financial result normally showed because of a breakdown in complying with the system of operating checks and balance available to company. It gives picture the company have internal control problem which refer to board of director who cannot abdicated its responsibility although many

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