Essay On The Role Of Chairman And Executive Officer

Another central feature of the board of directors is the question of whether the CEO is also the chairman of the board. When the CEO is also the chairman this is often referred to as “CEO duality”. In the US the CEO is often the chairman of the board. Studies have shown that the board in most cases

Since the board is accountable for official capacities, and as the CEO is in charge of coordinating organization strategy into

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

As Canadian Coalition for Good Corporate Governance indicates that the good governance of a corporation is essential to creating long-term sustainable value and reducing investment risk. In other words, the high quality performance of board directors plays a key role in the success of a corporation. We evaluate it based

The Board of Directors for United directs the company’s affairs in the appropriate way by meeting the interests of its shareholders and stakeholders. The board’s focus is to determine and review the company goals and policies, manage the organizational structure to ensure that the all the strategies are being implemented successfully, delegate authority to the management, and evaluates the implementation of business plans and strategies. The Chief Executive Officer (CEO) is the highest position in the United’s corporate hierarchy. The role of a United’s CEO is to develop high level strategies, take major corporate decisions, and manage the overall operations and resources of the company.

It is the board's responsibility to consider and authorize a suitable remuneration package for the company's chief executive officer (CEO), make recommendations with respect to the attractiveness of dividends and dividends pay out, approve stock splits, form the audit committees, approve the company's financial statements, oversee management’s involvement in the shareholders and other stakeholders long-term interests and recommend or discourage major decisions such as acquisitions and mergers.

Harley Davidson has been identified by some in the press as having weak corporate governance. This could be true for a myriad of reasons including directors not preforming their fiduciary obligations by putting their personal goals ahead of the goals of the true owners; the stockholders. Weak corporate governance can be very hard to identify in many instances. The decisions a board makes can take years to come to fruition, so identifying poor governance could be extremely delayed. Stock price or company health is also not a good indicator in all cases such as in the case of Tenet Healthcare. The CEO, Jeffrey Barbakow, delivered six years of record growth when the company imploded in 2002. (https://www.forbes.com/forbes/2003/0512/106.html). Tenet was investigated for Medicare fraud and was ousted from the board and the stockholders in turn suffered great losses. Guarding against having a board that engages in poor governance can be mitigated by ensuring that most of the members are independent directors. This alleviates most of the possibility of conflict of interest. In examining Harley Davidson to better understand their governing process, we will try to answer some basic questioned gleaned from their article of incorporation, bylaws, and stockholder’s agreements located on their corporate website. The first question, and one of the most important as it relates to independence is, “Are the CEO and Board Chairman the same person?” In this case, Harley Davidson’s board does

The Board of Directors are in charge of determining the corporation’s leadership structure on an annual basis and determine if the board will be led by an independent Chairperson or an independent Lead Director. The board has decided that Ronald Sargent, the CEO of Staples, will remain and the Chairman of the board. The Board of Directors is broken down into five committees made up of around three or four board members. Each committee has there own responsibilities and are in charge of making critical decisions that they must assure is communicated properly throughout the entire company. This leadership structure assures that the Board of Directors has a proper balance of leadership roles that allows for a system that prevents any conflict of interests that may come from having the CEO serving on the board.

Public debate regarding corporate governance issues tends to focus on one primary topic at a time, depending on the dictates of current events. Classified boards, “overboarding,” director compensation, risk management—the attention of the corporate governance community has been focused on each

The U.S. has separation of ownership and management. SOX gave the SEC the ability to prevent people from serving as officers and directors. Non-executive directors oversee the managers’ performance. The board of directors includes the executive & the non-executive directors who plan the path of the organization. The independent directors’ main responsibility is to manage all activities of the management board.

It was absolutely obvious to the board that one person can fulfill both roles and act quickly enough in taking corporate initiatives. On the other hand, issue with conflicts of interests, decision-making, and possible corruption has risen many times. Also, it makes more difficult to the board objectively evaluate the CEO/Chairman if one person hold the spot.

Researchers have suggested that chairman/chief executive duality is a double-edged sword . While some stockholders are put off by the absence of board control and checks and balances, others are reassured by the presence of unity of command and the absence of potentially acrimonious conflict between strong-minded individuals. Finkelsein and D’Aveni found that a major factor in divining the success of this duality was the level of CEO informal power.

In the combined leadership structure the CEO of the firm also works as the chairman of the board. In the split structure on the other hand the powers and the responsibilities of CEO and that of chairman of the board are separated (Ponnu, 2008). The Boards of Directors are expected to be more independent and efficient in fulfilling their monitoring duties when the CEO is not the chairman of the board (Osma, 2006). The agency theory argues that CEO dominance can lead to opportunistic behaviour which can decrease shareholder wealth. Al-Harkan (2005) reports that the importance of separating the responsibilities of the chairman and the CEO will help companies achieve an effective corporate governance system.

Corporate Governance refers to the way organizations are regulated and governed. The Governance structure shows how rights and responsibilities are shared among various stakeholders who are concerned with the operations of the organization. It is also critical to take note of the regulatory environment in which the organization is operating. Organizations have to decide on mechanisms to be followed to achieve the desired results. In my case my company’s Chairman himself must create proper mechanism or system for the better organizational culture ensuring that the Director and Management Committee functions properly and that in turn make the other management team to perform efficiently and effectively. He must ensure that there is full participation during meetings that all relevant matters are discussed and that effective decisions are made and carried

Like most multinational corporations, the shareholders own the company and they may also be the board of directors. A Chief Executive Officer (CEO) will be appointed to nominate and manage the operation of the company as a whole. A Chief Operating Officer (COO) will be managing the company’s day-to-day operations and reports them to CEO. The Chief Financial Officer (CFO) will be managing the finance and account together with the