2. Board of Directors
Role of the Board
Board Structures
1. All Executive Board
2. Majority Executive Board
3. Majority Outside Board
4. Two-tier Board
(i) Supervisory Board
(ii) Management or Executive Board
3. Responsibilities of the Board
1. Determination of Board functions.
2. Setting the values, mission and vision.
3. Preparing strategic plan, operating plan
and budget.
4. Ensuring adequate resources.
5. Monitoring progress towards achieving
the agreed objectives.
4. Responsibilities of the Board
6. Preparation of a work plan.
7. Mentoring, monitoring and evaluating
the Chief Executive.
8. Ensuring compliance and disclosure.
9. Communicating with stakeholders.
5. The Role of Directors
A. The Performance Role
1.Contributing know-how, expertise and
information about the external
environment.
2.Representing the Company and
networking.
B. The Conformance Role
1. Judging.
2. Questioning the board’s assumptions.
3. Surpervising Executive management.
7. The Responsibilities (Liabilities) of Directors
1.Responsibilities to shareholder.
2.Duty to act honestly.
3.Duty not to make secret profits.
4.Duty to exercise reasonable care, diligence
and skill in their work in the board.
5.Selection and monitoring of key
executives.
6.Review of remuneration.
8. 7. Ensuring a formal and transparent board
nomination process.
8. Monitoring and managing potential
conflicts of interests.
9. Monitoring the effectiveness of
corporate governance practices.
10. Ensuring the integrity of company’s
accounting and financial reporting
system.
11. Putting in place appropriate control
systems.
11. Non-Executive Directors – Their Role
1.Infusion of external perspective.
2.Role in the formation of company strategy.
3.Succession Planning
4.Takeovers and Mergers.
5.Monitoring.
6.Board Meetings.
7.Counselor to the Chairman.
8.Strengthening of Accountability of
Management to Shareholders.
12. Nominee Directors - Induction
1.Under the provisions of Term Loans.
2.Investments in shares of Private
Companies.
3.Large shareholdings by investment
institutions.
4.Underwriting developments.
Role of Nominee Director
13. Structure and Composition of Boards
A.Structure – How to Balance?
1.Representation of Core Management
Group.
2.Representation of Independent
Elements.
3.Majority Representation.
4.Nominees Representation.
5.Professional Representation.
15. What makes Effective Boards
1.Existence of Board as a Team.
2.Guarding against the breaking of the
team bond.
3.Creation of a climate of trust.
4.Foster a culture of open Dissent.
5.Allow role switches.
6.Ensure Individual Accountability.
16. Independent Directors – Meaning
How to strengthen them?
1.Appointment.
2.Remuneration.
3.Human Resources.
4.Other areas.
5.Periodic review.
6.Liability insurance.
7.Training of Independent Directors.
17. 8.Disclosure by independent directors.
9.Separate meeting of independent
directors.
10.Designation of one or more as lead
independent directors.
11.Substantial shareholding.
18. Board Leadership
-Barriers to Effective Board Leadership.
1.Time Management.
2.Resistance to risk taking.
3.Strategic planning.
4.Complexity.
5.Micro Management.
6.Clinging to tradition.
7.Confused Roles.
8.Past habit.
19. The Board Chairman and the CEO
Board Chairman – Concept and Role
Qualities of Chairman
1.Conceptualiser.
2.Character.
3.Sound Health.
4.Aloofness.
5.Listening to criticism.
6.Own critic and judge.
7.Risk taker.
20. Functions of the Chairman
1.Management Function.
2.Approval Function.
3.Leadership Function.
4.Consultative Function.
5.Spokesperson.
6.Initiative Function.
7.Special Invitees.
8.Planning and Running of Meetings.
9.Drafting of Minutes.
21. The CEO and His Role
1. Periodical review of systems and
procedures.
2.Consultation with Chairman.
3.Relations with NEDs.
4.Talent recognition.
5.Make available for performance review.
22. Relationship between Chairman and
CEO
1.Complementing the CEO.
2.Directing the CEO.
3.Consulting and Coaching the CEO.
4.Reviewing and controlling.
5.Restricting the power of the CEO.
Separation of Positions of Board
Chairman and the CEO.
