Essay on Corporate Governance - Role of Board of Directors

Words: 1603

Pages: 7

Open Document

CORPORATE GOVERNANCE - ROLE OF BOARD OF DIRECTORS
People often question whether corporate boards matter because their day-today impact is difficult to observe. But, when things go wrong, they can become the center of attention. Certainly this was true of the Enron, Worldcom, and Parmalat scandals. The directors of Enron and Worldcom, in particular, were held liable for the fraud that occurred: Enron directors had to pay $168 million to investor plaintiffs, of which $13 million was out of pocket (not covered by insurance); and Worldcom directors had to pay $36 million, of which $18 million was out of pocket. As a consequence of these scandals and ongoing concerns about corporate governance, boards have been at the center of the policy …show more content…
But that does not quite answer our cardinal question as to ‘how the role the board plays is related to the overall corporate governance of the organization’. Nevertheless one thing is certain thus far is that the BoD lead and control a company and hence an effective board is fundamental to the success of the company. The board is the link between managers and the investors, and is essential to good corporate governance and investor relations. Since corporate governance represents the value framework, the ethical framework and the moral framework under which business decisions are taken; it therefore calls for three factors:

1. Transparency in decision-making;

2. Accountability which follows from transparency because responsibilities could be fixed easily for actions taken or not taken, and;

3. The accountability is for the safeguarding the interests of the stakeholders and the investors in the organization.

Decisions relating to board composition and structure will be of fundamental

Corporate Boards Essay

Running Head: CORPORATE BOARDS Corporate Boards Corporate Boards In the field of corporate governance, the roles of the board of directors in a corporation are the central part to operate a big corporate entity. The main roles for the directors are to implement control and management in the organization to run all the functions in a smooth manner (Ferris & Yan, 2007). The main responsibilities and duties of the directors in an organization are to define the policies and procedures of the…

Words 464 - Pages 2

Corporate Governance Second paper

in Good Corporate Governance: Roles & Ethical Issues Corporate Governance & Ethics J. Owens, Professor West Texas A&M University Abdulaziz AL-Hawil 26 October 2014 Purpose: The aim of this paper is to elucidate how the board directors, creditors, activist shareholders, rating agencies and security analysts are playing substantial roles in order to ensure good corporate governance while facing ethical issues to be managed. I. Introduction II. Board of Directors Roles & Ethical…

Words 2508 - Pages 11

good corporate governance Essay examples

Good corporate governance Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way in which a corporation is directed, administered or controlled. Corporate governance also includes the relationships among the many players involved (the stakeholders) and the goals for which the corporation is governed. The principal players are the shareholders, management and the board of directors. Other stakeholders include employees…

Words 1715 - Pages 7

Corporate Governance in Banking Sector of Bangladesh Essay

of the corporate governance into forefront of the policy discussions. In an increasingly deregulated policy environment, the big corporate failures have raised the need for implementing competent corporate governance practices. The recent financial crises in different countries have verified how the lack of good governance practices in the financial institutions can lead to a crisis in the system leaving long-term consequences to the. Among the financial institutions, the corporate governance…

Words 16145 - Pages 65

Research In Motion: Governance At Risk?

Research in Motion: Governance at Risk? Professor: Horng- Tzu Hao COMMERCE 4AF3, C03 Introduction Research In Motion (RIM) is a telecommunications company based in Waterloo, Ontario which has shown a decline in share price and growth since 2008. As a result, RIM’s shareholders have questioned the governance structure of the company, whether those in charge of governance are adequate enough to guide the…

Words 1834 - Pages 8

Corporate Governance Essay example

Title: Corporate Governance Assignment topic Option 1 Conduct a review of the governance of your organisation (or one with which you are familiar) in the form of a report to the Chairman (or President) of the Governing Board of Directors. In the brief report use the concepts, tools and techniques learned in this subject to review the structure, process and effectiveness of the governance of the organisation and make recommendations for appropriate improvements. Executive summary This report…

Words 2495 - Pages 10

Critical Analysis of Reckitt Benckiser Corporate Governance Principles Essay

They noted a possible area of divergence from the code in which, while the code recommends that all directors in FTSE 350 companies go up for an annual re-election, their investors are not unanimously in support with it but explained that it is still under consideration. FRC (2010) BOARD ORGANISATION AND EFFECTIVENESS The role of and matters reserved for the Board As required by the code, the board of Reckitt Benckiser confirmed responsibility for leadership and control of the organisation and…

Words 4038 - Pages 17

Essay on RBC Project

company 2 3.0 Governance 3 3.1Composition of its Board of Directors 3 3.2 Committee Structures 3 3.2.1 Audit Committee 3 3.2.2 Risk Committee 4 3.2.3 Corporate Governance and Public Policy Committee 5 3.2.4 Human Resources Committee 5 3.3 Major shareholders 6 3.4 Review of RBC’s Governance 6 4.0 Ethics and Social responsibility 6 4.1 Ethical and socially responsible 6 4.2 Negative ethical or social responsibility issues 7 5.0 Organization 8 5.1 Organizational Structure 8 5.2 RBC’s Corporate Culture 8…

Words 3001 - Pages 13

Newcrest Case Study

standard of corporate governance that is critical to help Newcrest in achieving high performance as well as conformance to the specific standards, rules and regulations. Newcrest’s effective distribution of rights and responsibilities among different participants such as the board, managers, shareholders and other stakeholders have enhanced their economic performance and public trust. It is important for Newcrest to clarify their code of conduct, rules and procedures for making corporate decisions…

Words 970 - Pages 4

Essay on Acca Governance

CORPORATE GOVERNANCE sustainability briefing paper 4 in partnersHip WitH 1 CORPORATE GOVERNANCE A company that is well governed is one that is accountable and transparent to its shareholders and other stakeholders, such as employees, creditors, customers and society at large. Corporate governance is the means by which companies are directed, administered and controlled. it influences how the objectives of the company are set and achieved, how risk is monitored and assessed, and how…

Words 3627 - Pages 15