Description
responsibilities of board of directors and its role in strategic management. It also includes criteria for selecting good director. It also explains the trends in corporate governance.
1. 2. 3. 4. 5. 6. 7.
INTRODUCTION BRIEF THEORETICAL BACKGROUND RESPONSIBILITIES OF THE BOARD MEMBERS OF A BOARD OF DIRECTORS NOMINATION & ELECTION OF BOARD MEMBERS ORGANISATION OF THE BOARD TRENDS IN CORPORATE GOVERNANCE
CORPORATE GOVERNANCE CAN BE DEFINED AS “THE
DETERMINATION OF THE BROAD USES TO WHICH
ORGANISATIONAL RESOURCES WILL BE DEPLOYED &
THE
RESOLUTION OF CONFLICTS AMONG MYRIAD
PARTICIPANTS IN ORGANISATIONS.”
1.
SETTING CORPORATE STRATEGY, OVERALL
DIRECTION, MISSION OR VISION.
2. 3.
HIRING & FIRING THE CEO & TOP MANAGEMENT. CONTROLLING, MONITORING OR SUPERVISING TOP MANAGEMENT. REVIEWING & APPROVING THE USE OF RESOURCES. CARING FOR SHAREHOLDER INTEREST
4. 5.
?
MONITOR
EVALUATE & INFLUENCE & DETERMINE
?
? INITIATE
o INSIDE o
DIRECTORS
OUTSIDE (INDEPENDENT) DIRECTORS
•
• •
AFFILIATED DIRECTORS
RETIRED DIRECTORS FAMILY DIRECTORS
o
CODETERMINATION: SHOULD EMPLOYEES SERVE ON
BOARDS? DIRECTORATES
o INTERLOCKING
o o
IS WILLING TO CHALLENGE MANAGEMENT WHEN NECESSARY (95%) HAS SPECIAL EXPERTISE IMPORTANT TO THE COMPANY (67%)
o
o o
IS AVAILABLE OUTSIDE MEETINGS TO ADVISE MANAGEMENT (57%)
HAS EXPERTISE ON GLOBAL BUSINESS ISSUES (41%) UNDERSTANDS FIRM’S KEY TECHNOLOGIES & PROCESSES (39%)
o
BRINGS EXTERNAL CONTACTS THAT ARE POTENTIALLY VALUABLE TO THE
FIRM (33%)
o
HAS DETAILED KNOWLEDGE OF THE FIRM’S INDUSTRY (31%)
o
o
IS HIGHLY VISIBLE IN HIS OR HER FIELD (31%)
IS ACCOMPLISHED AT REPRESENTING THE FIRM TO STAKEHOLDERS (18%)
1.
GOOD GOVERNANCE LEADS TO BETTER
PERFORMANCE OVER TIME.
2.
GOOD GOVERNANCE REDUCES THE RISK OF THE
COMPANY GETTING INTO TROUBLE. GOVERNANCE IS A STRATEGIC ISSUE.
3.
o o
o
o
BOARDS ARE GETTING MORE INVOLVED NOT ONLY IN REVIEWING & EVALUATING COMPANY STRATEGY BUT ALSO IN SHAPING IT. INSTITUTIONAL INVESTORS ARE BECOMING MORE ACTIVE ON BOARDS & ARE PUTTING INCREASING PRESSURE ON TOP MANAGEMENT TO IMPROVE CORPORATE PERFORMANCE. SHAREHOLDERS ARE DEMANDING THAT DIRECTORS & TOP MANAGERS OWN MORE THAN TOKEN AMOUNTS OF STOCK IN THE CORPORATION. STOCK IS INCREASINGLY BEING USED AS PART OF A DIRECTOR’S COMPENSATION. NON-AFFILIATED OUTSIDE DIRECTORS ARE INCREASING THEIR NUMBERS & POWER IN PUBLICALLY HELD CORPORATIONS AS CEOS LOOSEN THEIR GRIPS ON BOARDS. OUTSIDE MEMBERS ARE TAKING CHARGE OF ANNUAL CEO EVALUATIONS.
o
o
o o
BOARDS ARE GETTING SMALLER, PARTIALLY BECAUSE OF THE REDUCTION IN THE NUMBER OF INSIDERS BUT ALSO BECAUSE BOARDS DESIRE NEW DIRECTORS TO HAVE SPECIALISED KNOWLEDGE & EXPERTISE INSTEAD OF GENERAL EXPERIENCE. BOARDS CONTINUE TO TAKE MORE CONTROL OF BOARD FUNCTIONS BY EITHER SPLITTING THE COMBINED CHAIR/ CEO POSITION OR ESTABLISHING A LEAD OUTSIDE DIRECTOR POSITION. CORPORATIONS ARE INCREASINGLY LOOKING FOR INTERNATIONAL EXPERIENCE IN THEIR BOARD MEMBERS. SOCIETY, IN THE FORM OF SPECIAL INTEREST GROUPS, INCREASINGLY EXPECTS BOARDS OF DIRECTORS TO BALANCE THE ECONOMIC GOAL OF PROFITABILITY WITH THE SOCIAL NEEDS OF SOCIETY. ISSUES DEALING WITH WORKFORCE DIVERSITY & THE ENVIRONMENT ARE NOW REACHING BOARD LEVEL.
Thank you for Listening
doc_520900641.pptx
responsibilities of board of directors and its role in strategic management. It also includes criteria for selecting good director. It also explains the trends in corporate governance.
1. 2. 3. 4. 5. 6. 7.
INTRODUCTION BRIEF THEORETICAL BACKGROUND RESPONSIBILITIES OF THE BOARD MEMBERS OF A BOARD OF DIRECTORS NOMINATION & ELECTION OF BOARD MEMBERS ORGANISATION OF THE BOARD TRENDS IN CORPORATE GOVERNANCE
CORPORATE GOVERNANCE CAN BE DEFINED AS “THE
DETERMINATION OF THE BROAD USES TO WHICH
ORGANISATIONAL RESOURCES WILL BE DEPLOYED &
THE
RESOLUTION OF CONFLICTS AMONG MYRIAD
PARTICIPANTS IN ORGANISATIONS.”
1.
SETTING CORPORATE STRATEGY, OVERALL
DIRECTION, MISSION OR VISION.
2. 3.
HIRING & FIRING THE CEO & TOP MANAGEMENT. CONTROLLING, MONITORING OR SUPERVISING TOP MANAGEMENT. REVIEWING & APPROVING THE USE OF RESOURCES. CARING FOR SHAREHOLDER INTEREST
4. 5.
?
MONITOR
EVALUATE & INFLUENCE & DETERMINE
?
? INITIATE
o INSIDE o
DIRECTORS
OUTSIDE (INDEPENDENT) DIRECTORS
•
• •
AFFILIATED DIRECTORS
RETIRED DIRECTORS FAMILY DIRECTORS
o
CODETERMINATION: SHOULD EMPLOYEES SERVE ON
BOARDS? DIRECTORATES
o INTERLOCKING
o o
IS WILLING TO CHALLENGE MANAGEMENT WHEN NECESSARY (95%) HAS SPECIAL EXPERTISE IMPORTANT TO THE COMPANY (67%)
o
o o
IS AVAILABLE OUTSIDE MEETINGS TO ADVISE MANAGEMENT (57%)
HAS EXPERTISE ON GLOBAL BUSINESS ISSUES (41%) UNDERSTANDS FIRM’S KEY TECHNOLOGIES & PROCESSES (39%)
o
BRINGS EXTERNAL CONTACTS THAT ARE POTENTIALLY VALUABLE TO THE
FIRM (33%)
o
HAS DETAILED KNOWLEDGE OF THE FIRM’S INDUSTRY (31%)
o
o
IS HIGHLY VISIBLE IN HIS OR HER FIELD (31%)
IS ACCOMPLISHED AT REPRESENTING THE FIRM TO STAKEHOLDERS (18%)
1.
GOOD GOVERNANCE LEADS TO BETTER
PERFORMANCE OVER TIME.
2.
GOOD GOVERNANCE REDUCES THE RISK OF THE
COMPANY GETTING INTO TROUBLE. GOVERNANCE IS A STRATEGIC ISSUE.
3.
o o
o
o
BOARDS ARE GETTING MORE INVOLVED NOT ONLY IN REVIEWING & EVALUATING COMPANY STRATEGY BUT ALSO IN SHAPING IT. INSTITUTIONAL INVESTORS ARE BECOMING MORE ACTIVE ON BOARDS & ARE PUTTING INCREASING PRESSURE ON TOP MANAGEMENT TO IMPROVE CORPORATE PERFORMANCE. SHAREHOLDERS ARE DEMANDING THAT DIRECTORS & TOP MANAGERS OWN MORE THAN TOKEN AMOUNTS OF STOCK IN THE CORPORATION. STOCK IS INCREASINGLY BEING USED AS PART OF A DIRECTOR’S COMPENSATION. NON-AFFILIATED OUTSIDE DIRECTORS ARE INCREASING THEIR NUMBERS & POWER IN PUBLICALLY HELD CORPORATIONS AS CEOS LOOSEN THEIR GRIPS ON BOARDS. OUTSIDE MEMBERS ARE TAKING CHARGE OF ANNUAL CEO EVALUATIONS.
o
o
o o
BOARDS ARE GETTING SMALLER, PARTIALLY BECAUSE OF THE REDUCTION IN THE NUMBER OF INSIDERS BUT ALSO BECAUSE BOARDS DESIRE NEW DIRECTORS TO HAVE SPECIALISED KNOWLEDGE & EXPERTISE INSTEAD OF GENERAL EXPERIENCE. BOARDS CONTINUE TO TAKE MORE CONTROL OF BOARD FUNCTIONS BY EITHER SPLITTING THE COMBINED CHAIR/ CEO POSITION OR ESTABLISHING A LEAD OUTSIDE DIRECTOR POSITION. CORPORATIONS ARE INCREASINGLY LOOKING FOR INTERNATIONAL EXPERIENCE IN THEIR BOARD MEMBERS. SOCIETY, IN THE FORM OF SPECIAL INTEREST GROUPS, INCREASINGLY EXPECTS BOARDS OF DIRECTORS TO BALANCE THE ECONOMIC GOAL OF PROFITABILITY WITH THE SOCIAL NEEDS OF SOCIETY. ISSUES DEALING WITH WORKFORCE DIVERSITY & THE ENVIRONMENT ARE NOW REACHING BOARD LEVEL.
Thank you for Listening
doc_520900641.pptx