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BOD & RELATED ISSUES ( agency theory) - Coggle Diagram
BOD & RELATED ISSUES ( agency theory)
Definition
Cadbury 1992
monitor and assessment
spit chairman and CEO
independence person
Tyson report 2003
diversity skill, experience, background
improve communication and relationships
Higgs report 2003
NED: non-executive director
At least half of boad from NED
remunerated appropriate
link board and shareholders
communicate regularly
Financial Reporting Council (FRC)
NED challenges and develops strategy
balance skill, independence, experience
Chairman leading board
sufficient time to discharge
Board meeting
get a balance between long-short term issues
should supportive information: risk, alternatives identify and distribution
regular and attendance
Board structure
Unitary US
control but no various levels
Two -Tired (Dual) UK
maximize efficiency, avoid authority
various levels
management < supervisory
BOD
Remuneration committees
100% NED
Risk committees
majority NED
Nomination committees
appoint, consider plan,
majority NED
Audit committees
sign audit contract
100% NED
ED: Nomination + Risk
Criticism of NEDS
Insufficient time with the company
Accepting the view of ED
Lack of knowledge
Chairman, NED: part time; ED: full time
ROLE of NED
Remuneration + Audit :Risk
Remuneration : People
Nomination + Risk+ Remuneration + Audit :Strategy
Audit: scrutinising