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.
Nobody downloaded yet

Corporate Governance: Role of non-Executive Directors - Essay Example

Comments (0) Cite this document
Introduction A non-executive director of an organization is not a part of the management of the organization. What distinguishes a non-executive director from an executive director is the fact that he or she is not an employee of the organization neither is related with the organization in any other manner…
Download full paperFile format: .doc, available for editing
Polish This Essay94.4% of users find it useful
Corporate Governance: Role of non-Executive Directors
Read TextPreview

Extract of sample
"Corporate Governance: Role of non-Executive Directors"

Download file to see previous pages It is critical to understand that NED is different from independent directors as NED can own shares of the firm whereas independent directors need not to have the shares. It is critical to note however, that the overall independence of NEDs is often based upon two important criteria of exercising independent business judgment and non-subservience to any influence of the management of the organization. (Cray, 1994) One tiered board of directors are unique in the sense that the overall control of managing directors of the firm is in the hands of a different supervisory board whereas in two tier system this is an additional responsibility of the existing board of directors. Over the period of time, the role of NEDs has increased specially in single tiered boards with non-executive directors taking independent view of the overall governance mechanisms within the organization. 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. The recent failure of financial institutions and resulting economic downturn has further fueled the debate about whether the companies are being managed in their right sprit or not. The losses incurred by shareholders due to practices of managers therefore outlined that corporate governance should be strengthened while at the same time ensuring that companies meet a certain criteria against which their performance is measured.( Gay, 2001) Corporate governance therefore emerged as a system to control and direct firms. It therefore not only defines the relationship of firms with that of the shareholders but with the employees and other stakeholders also. Corporate governance as a mechanism also outlines ways and means through which the conflict of interest between different stakeholders is actually prevented. By setting out clear and vivid boundaries for each of the stakeholders, corporate governance provides a mechanism through which the interests of each stakeholder are monitored and governed. It is also important to note that recent debate has also focused on the overall economic efficiency of implementing corporate governance and whether the implementation of corporate governance codes is just a cost or it could also lead to the benefits for all the stakeholders also. Corporate governance as a mechanism is based upon certain principles which govern as to how the corporations should be governed while the stakes of all the stakeholders are protected. First principle outlines that firms should give right and equitable treatment to shareholders suggesting that organizations should develop mechanism to facilitate the rights of the shareholders and how such rights can be exercised. It also suggests that the interest of other stakeholders such as creditors, debtors, government, employees and society as a whole should also take into consideration when managers manage the firms. (Hall, & Liebman,1998). One of the key and most important principles outlined by the corporate governance is the roles and responsibilities of board of directors. Corporate governa ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Corporate Governance: Role of non-Executive Directors Essay”, n.d.)
Retrieved from https://studentshare.org/business/1398088-contemporary-corporate-governance-issues
(Corporate Governance: Role of Non-Executive Directors Essay)
“Corporate Governance: Role of Non-Executive Directors Essay”, n.d. https://studentshare.org/business/1398088-contemporary-corporate-governance-issues.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
Twelve Questions regarding the YCP Company
Moreover, the year of establishment of this company was the era of the evolution of telecommunication industry into the internet age. The advancement was of immense attraction for the young generation and so were the marketing focus of YCP. Thus, the Core reason behind the fast growth in the initial years of establishment were excitement of new generation led by the new technology, followed by the easy availability at low price and last but not the least the alluring advertisements.
10 Pages(2500 words)Research Paper
The Role of Corporate Governance Mechanism of Independent Directors
The Role of Corporate Governance Mechanism of Independent Directors. In this paper the mechanism of independent directors under the guidelines of Corporate Governance will be analyzed to see how effectively it was designed and how well it has been implemented in the real life.
9 Pages(2250 words)Essay
Corporate Governance and Non-Executive Directors: A Good Start But Not Enough
This paper argues that whilst there have been some measures put in place as a result of the assumption of non-executive directors, there still are a plethora of issues and problems that need to be addressed and resolved, including the degree to which directors can be held liable for wrongdoing and the existence of mechanisms to ensure redress for corporate malfeasance and misfeasance.
12 Pages(3000 words)Essay
Role of Independent Non-Executive Directors
Running head: ROLE OF INDEPENDENT NON-EXECUTIVE DIRECTORS Role of Independent Non-Executive Directors [Name of the writer] [Name of the institution] Role of Independent Non-Executive Directors Introduction There are many definitions of "independent non-executive directors" of board members.
9 Pages(2250 words)Essay
The Seeking of the Non-Executive Directors (NEDs)
Characteristically, in any corporate organization the full time executive directors possess extensive powers with reference to the dealings and matters of the organization they are paid to manage in support of the shareholders. Nevertheless, the executive directors might not always bear the interests of the shareholders in their mind while carrying out their executive responsibilities.
5 Pages(1250 words)Essay
Explain the duties and responsibilities of the Non-executive Directors (NEDs) in the Corporate Governance process: a) within
This entails the inclusion of Non-executive Directors or NEDs in the company board of Directors in the process of promoting good corporate governance. NED’s authority is derived from UK Corporate Governance Code that defines the legal framework of its inclusion in the boards of companies while Companies Act of 2006 which took effect in October of 2009 and was preceded by similar corporate governance initiative such as the Cadbury Report of 1992 which first raised the idea of instituting corporate governance in board rooms defining it as “the system by which companies are directed and controlled”.
4 Pages(1000 words)Essay
Non-Executive Directors in Corporate Governance
Corporate governance has thus become a national as well as an international issue (Cadbury 2002, Kiel and Nicholson 2003b). This has ensued in modifying awareness to be given to matters like the efficiency of reporting disclosure, internal controls, audit committees, functions of the board and the freedom of the directors and auditors.
11 Pages(2750 words)Essay
Commercial law
In addition, the Anglo-American regime exhibits a pattern of dispersed share ownership and well-developed stock markets in which institutional investors play a leading role. Notwithstanding these structural similarities, the mechanism of shareholder capitalism in the United
9 Pages(2250 words)Case Study
Corporate governance and the role of executive incentives
With numerous mechanisms working under the aegis of corporate governance, executive incentive attracts the greatest attention owing to its
10 Pages(2500 words)Essay
Are non-executive directors capable of fulfilling the role given to them in the UK Corporate Governance Code
directors should be able to bring an independent judgment on issues that touch on strategy, performance, resource utilization, appointment of persons to key positions and standards of conduct in their respective companies. Due to lack of a legal distinction in the UK unitary
5 Pages(1250 words)Essay
Let us find you another Essay on topic Corporate Governance: Role of non-Executive Directors for FREE!
Contact us:
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us