The Paradox Of NED

Corporate governance: “The set of laws, policies, incentives, and monitors designed to handle the issues arising from the separation of ownership and control.” (Cornett, Adair, & Nofsinger, 2016, p. 16).

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.

The study conducted by Hardjo and Alireza (2012, p. 4) represented that the independent directors have a few understandings of the company’s circumstances, and make decisions depends on what the management provides (Hardjo & Alireza, 2012, p. 4). Although Gallagher and Bennie (2015, p. 20) contended that the independent directors are likely to express their individual opinions and focus on the interest of the company. Thus, the formation of the directors’ board with a significant number of independent directors might not prevent DSE from the downfall due to reliance on filter information which is not adequate to make decisions (Rankin et al., 2012, p.

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.

Independence means procedures and structures are in place so as to minimize, or avoid completely conflicts of interest. In Sarbanes-Oxley Act, “independent” director is the one who does not accept any advisory, consulting and other compensation from the issuer and not an affiliated person of the issuer or its subsidiaries, except that he or she as a member of the audit committee based on their capacity.

The board of Hastie have appeared to failed in all four key functions of the board (Tricker 2012, p174, Fig 7.1) being Strategy Formulation, Policymaking, Monitoring & Supervision and Accountability which could reasonably be judged that the Hastie Board of Directors had operated outside of 7 of the 8 principles (the only Principle seemingly being observed was ‘Principle 8 – Remunerate fairly and responsibly) (ASX 2010, p40) described so the review will focus on Principles 3 and 4.

In principle, as retrieved from Wikipedia, “an Independent director, is a director of a board of

To make matters worse, Nortel’s Board of administrators failed to have one member that had monetary experience. The twelve-member board was freelance of Nortel, however, most of the members had alternative directorships. This created it troublesome for them to

The short story begins in the suburbs of a middle class, American society. After what seems to be a fun filled night of partying and drinking. Neddy Merrill the protagonist initially appears very assured; he basically has a perfect family, very good high school status, and very few complications in life; but from the text we get the hint that Neddy may be a suffering alcoholic. In spite of his age, he feels young and full of energy therefore he decides to swim across town through the neighborhood pools. As so his journey becomes less enjoyable as the day comes to an end. The water becomes cloudy, uninviting and he becomes drained. Also the people in his whereabouts become less welcoming including his mistress who wants basically nothing to

Describe the role of the Board of Directors in comparison to the role of the Executive Director. What is expected of each, who is in charge of what and in what

The role of the Independent Non Executive Directors is to provide a balance to the Board and to ensure that the discussions are robust. The NEDs bring skills, knowledge and experience to the Board that the executive directors do not have as their backgrounds are different they are expected to be able to offer different ideas.

Prior to constructing a nonprofit board, the basic responsibilities and duties of its members must be determined. These functions are steered by the organization’s mission and goals. BoardSource (2012) furthers this by stating, “The board should review the mission periodically – for example, at the beginning of every strategic planning process – to make sure it remains useful and valid” (p. 9). A NPO’s mission and vision statements communicates the organization’s purpose, identifies the group(s) it serves, and provides direction for how the organization will achieve these goals. It is important to understand that these statements are not solely external messages, however, they are also used internally to stimulate and impact the board and staff, establish goals and evaluation measures, and stimulate successful governance through the strategic planning process. Board members who are entrenched in the mission are better able to fulfill their governance duty as it keeps the organization’s true focus at the forefront of decision making.

The board of directors play a very integral role in fostering the long term success of the company as well as promoting the interest of the stakeholders (www.northropgrumman.com) . The board has developed principles of corporate governance which majorly reinforce the company’s values of teamwork and respect for diversity among others. The board reviews the principles annually to inform if any modification is to be made. Before the final decisions are made in the organization, negotiation process is followed where the stakeholders’ views and feedback are collected and evaluated. Such evaluation of feedback ensures development of policies which are in conformity with the needs and the interest of all the stakeholders increasing a sense of loyalty and accountability of each of the stakeholders to facilitate attainment of the objectives. Such views are evaluated and reviewed by the board annually before their

At Paramount the unitary board exists, where according to the textbook, a unitary board is when a company has a single governing body (Tricker 2009). A non- executive director is defined as a person who is not involved in the day to day management of an organisation but rather in business tasks such as strategic planning, and monitoring of executive directors. An executive director tends to be more involved in the managerial aspects of the company.

Whilst the definition of corporate governance most widely used is "the system by which companies are directed and controlled" presented by Cadbury Committee, (1992). More specifically it is the framework by which the various stakeholder interests are balanced, or, as the IFC (International Finance Corporation) states, "the relationships among the management, Board of Directors, controlling shareholders, minority shareholders and other stakeholders".