StudentShare
Contact Us
Sign In / Sign Up for FREE
Search
Go to advanced search...

Non-Executive Directors in Corporate Governance - Essay Example

Cite this document
Summary
The role and liability of the board and directors has come forward as a crucial matter in probing the reason of high profile crumples like Enron, Parmalat, One.Tel, WorldCom and HIH. This has produced a lot of debate on what the part of the directors is in 'monitoring', 'directing' or 'advising' a company…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97% of users find it useful
Non-Executive Directors in Corporate Governance
Read Text Preview

Extract of sample "Non-Executive Directors in Corporate Governance"

Download file to see previous pages

The need for altering the corporate governance and the accountability of non-executive directors has come forth due to the collapse of a number of high profile corporations ( Carver and Oliver 2002; Cadbury 2002; Vinten 2002; Taylor 2003). Oman (2001) tried to define corporate governance as the public and private establishments which includes polices, rules and consented business patterns, which based on the economy of the market economy, administer the relationship linking internal stake holders on one hand, and share holders on the other.

According to Cochran and Warwick (1988) corporate governance is: "an umbrella term that includes specific issues arising from interactions among senior management, shareholders, boards of directors, and other corporate stakeholders." 'Corporate governance' is seen as a fresh term which has entered our business terminology particularly in the last decade. Nevertheless connecting accountability with corporate governance (Cadbury 1992) is not a recent issue; it has grown with the development of the capitalistic system and growth of world economies (Vinten 2003).

The different issues to be considered in this paper are: accountability and the role of non-executive directors with regard to corporate governance and accountability. According to Sir Arthur Cadbury in his paper (Cadbury 1992, p.15) "Corporate governance is the system by which companies are directed and controlled". This is concerned with the institution of structures and procedures by which management is responsible to shareowners with the aim of raising shareholder worth. The OECD (2004, p.11) defines as "Corporate governance involves a set of relationships between a company's management, its board, its shareholders and other stakeholders.

Corporate governance provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interest of the company and its shareholders and should facilitate effective monitoring." A single structure or form is not suitable for all kind of businesses. This is actually acknowledged by the OECD rationales (2004 p.13). The reason is not only the intricacy and variety of actions that businesses are concerned with but also the lawful effects reckoning on the country's legal power and other social and cultural matters.

Corporate performance and analysis Majority of research work have been carried out trying to connect company operation with different factors like board independence (Bhagat and Black 2002). Most of these studies undertaken actually surveyed the 'for-profit organizations' and made use of the common operation indicants like profit margins, share value and ROI. Research on the effect of corporate governance in organizations is mainly concentrated with the use of quantitative data analysis, whereas corporate

...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Non-Executive Directors in Corporate Governance Essay”, n.d.)
Non-Executive Directors in Corporate Governance Essay. Retrieved from https://studentshare.org/miscellaneous/1514869-non-executive-directors-in-corporate-governance
(Non-Executive Directors in Corporate Governance Essay)
Non-Executive Directors in Corporate Governance Essay. https://studentshare.org/miscellaneous/1514869-non-executive-directors-in-corporate-governance.
“Non-Executive Directors in Corporate Governance Essay”, n.d. https://studentshare.org/miscellaneous/1514869-non-executive-directors-in-corporate-governance.
  • Cited: 0 times

CHECK THESE SAMPLES OF Non-Executive Directors in Corporate Governance

Corporate Governance, Role of Non-Executive Directors

This paper will review the role of non-executive directors in single tiered boards and how it has evolved over the period of time.... corporate governance Before discussing the role of non-executive directors and how their role has evolved during the recent past, it is critical to present an analysis of corporate governance.... The issue of corporate governance and how companies should be governed started to emerge after the large scale corporate scandals of Enron and WorldCom....
12 Pages (3000 words) Essay

Non-Executive Directors in the Corporate Governance Process

In law, there is no distinction between executive directors and non-executive directors in their standing in the company as enunciated in the Companies Act of 2006 (ICAEW 2013).... Explain the duties and responsibilities of the Non-executive Directors (NEDs) in the corporate governance process: a) within the context of the Board Committees, and b) more generally Class University Date In order to promote ideal corporate governance, UK regulatory bodies instituted structures and mechanism that would reinforce ideal reporting of performance pertaining to financial information and business operations of companies operating in the UK....
3 Pages (750 words) Essay

Structured Corporate Governance Principles in Case of Corporate Failures

The UK revised combined code was published in 2003 following considerable debate on its effectiveness in implementing changes in corporate governance (McNeil and Rimmington, 2004).... corporate governance guidelines were developed for listed companies and represent the best practice blueprint for big and small companies alike.... hellip; Structured corporate governance principles are necessary for listed companies and are especially useful in case of corporate failures where standards and effectiveness of the board and control systems could be flawed1. The Cadbury report laid the foundation for corporate governance in listed companies published in 1992 and other standards and guidance have appeared in recent years (Cadbury Report, 1992; Dedman, 2002)....
9 Pages (2250 words) Essay

Directors' Duties and Corporate Governance

The recommendations or regulations issued in each of countries converge in several issues concerning directors: the presence of independent non-executive directors in the board, participation of non-executives in nomination and remuneration committees, control and decision-making function of the executives, their fair remuneration.... The paper 'Directors' Duties and corporate governance' focuses on all corporate governance systems which are grounded on the legal, regulatory and best practice elements....
1 Pages (250 words) Essay

Corporate Governance, Reporting, and Regulation

The paper "corporate governance, Reporting, and Regulation" names the main function of the independent director - protecting the stakeholders' interests.... But his presence would not have any impact on the firm's performance if he is not efficient and the other factors causing the corporate governance are not managed efficiently.... The appointments of independent directors are mainly done from the point of view of better corporate governance and enhancing the independence of the company board....
6 Pages (1500 words) Term Paper

Non-executive Directors and Fulfilling the Role Given to Them in the UK Corporate Governance Code

The UK corporate governance code is divided into main principles and supporting principles that help in advancing its provisions.... The governance code of the UK which is related to corporate is a set of standards of good practice in relation to board of director's leadership and effectiveness, remuneration, degree of accountability and its relations to the shareholders.... Essentially the role of a non executive director is to provide creative contribution to the board of directors of a particular company....
4 Pages (1000 words) Essay

Behavioral Finance in Corporate Governance

Behavioral Finance in corporate governance - Independent Directors and Non-Executive Chairs.... psychological attributes of the respondents was testing in mock experiment subjects were made to electrocute stranger contrary to their own beliefs Leadership and corporate governance Modern liberal corporate governance calls for different professionals in leadership restrained by laws and rules.... Ethics of corporate governance Organizations are marred with ethical failures where fail to offer right counsel when they are required to People make excuses of ethical failures Loyalty and morality often clash among people in authority in corporate bodies....
2 Pages (500 words) Essay

Corporate Governance in Australia: the Centrebet Company and the CI Company

The financial statements of the Centrebet Company and the CI Company are examined from the perspective of corporate governance.... hellip; Recent corporate scandals have resulted in an enhanced thrust and focus on corporate governance.... ccording to the Australian Guidelines, corporate governance is the system by which companies are directed and managed, and this influences the process whereby organizational objectives are set and achieved, risk monitored and assessed, and performance-optimized (ASX 2003, pg 3)....
7 Pages (1750 words) Case Study
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Contact Us