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CG (Board & Management (Board - Governance- the work of the BODs or…
CG
Board & Management
Board - Governance- the work of the BODs or other governing body
responsible to..
supervision of executive mgmt
inward looking & past present focus
monitor & supervise the activities of executive mgmt
Strategy formulation
Outward looking & future focused
board works with top mgmt
seeing the firm in its strategic external environment.
Policymaking
inward looking & future focused
Strategies then need to be translated into policies
accountability to shareholders & others
outward looking & past present focus
with legitimate claims to accountability
Board structure
A board with a majority of executive directors
minority of non-executive
A board with majority of non-executive directors
professional board
many CG codes now demand this structure for listed companies.
Outside directors are expected to provide oversight & supervision of executive activities
non-executive not involve daily running bisnes
A board with only executive directors
top managers are also the director
small family firms & start-up businesses
A board with only non-executive directors
stakeholders boards
When board have this structure, the CEO & perhaps member of mgmt. team typically attend board meetings, but are there to provide information & to answer directors’ questions, not to be formally involved in the taking of decisions
not-for-profit entities such as charitable organizations
2-tier Board
supervisory board
outside directors & mgmt. board (MB) entirely of executive directors
half - represent the interest of the employees
half - represent the interest of the shareholders
lower, mgmt. board or committee
Advisory board (advisory committee)
give advice to the corporate directors
consist of
influential politicians
other prominent figures
business leaders
Stakeholders board
Representatives of non-shareholders stakeholders in the board
enhance not only corporate financial performance but also more important corporate social performance.
to protect the community over mgmt. and shareholders.
Mgmt - the work of the executive management team.
exercise of power over corporate entities.
perspective
stakeholders perspective - corporations are made responsive to the rights & wishes of stakeholders’.
Financial economics perspective - Their principal concern was with the ownership concentration in CG system around the world & the legal protection available to investors.
Relationship Perspective - the distribution of rights & responsibilities among the different participants in the organization
Societal perspective - holding the balance between economic & social goals & between individual & communal goal
Operational Perspective - an organization is directed & controlled.