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Corporate Governance (D. Trends in Corporate Governance (Woman &…
Corporate Governance
D. Trends in Corporate Governance
Woman & minorities are being increasingly on boards
Boards evaluating individual directors
Outside directors increasing their numbers
Boards are getting smaller
Institutional investors are becoming active on boards
Boards with international experience
Board are getting more involved
A. Role of the Board of Directors
Role of the Board in Strategic Management
Monitors
Evaluate & Influence
Initiate & Determine
Boards of Director's Continuum
Rubber Stamp
Minimal Review
Phantom
Nominal Participation
Active Participation
Catalyst
5 Responsibilities
Risk Vs Initiative
Succession Planning
Strategy of Organization
Sustainability
Effective board leadership
B. Board of Directors Composition
Inside Directors
: officers or executives employed by the corporation
Outside Directors
: executives of other firms but are not employees of board's corporation
Agency Theory Vs Stewardship Theory
Agency Theory
: Analyzing and resolving two problem that occur in relationships between principals (owners) & agents (top mgt)
Stewardship Theory
: Executives tend to be more motivated to act in the best interest of the corporation than in their own self interest.
E. The Role of Top Management
2 Primary Responsibilities
Provide executive leadership & a vision for the firm
The CEO presents a rate for others to identify with and to follow
The CEO articulates a strategic vision for the corp
The CEO communicates high-performance standard and also shows confidence in the followers abilities to meet these standars
Manage a strategic planning process
C. Impact of Sarbanes - Oxley on US Corporate Governance
To protect share-holders from the excessas & failed oversight. The key element were designed to formalized greater board independence & oversight
NUHA SYARIF 120310170074