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Analysis of the Role of Directors, Company Secretaries, Auditors and Shareholders in Private and Public Limited Companies - Term Paper Example

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The author of the paper considers the functions of directors, company secretaries, auditors, and shareholders. The author also identifies the ways they contribute to the operation of both private and public limited companies. The directors are the key actors for the company’s performance.  …
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Analysis of the Role of Directors, Company Secretaries, Auditors and Shareholders in Private and Public Limited Companies
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Extract of sample "Analysis of the Role of Directors, Company Secretaries, Auditors and Shareholders in Private and Public Limited Companies"

Download file to see previous pages In fact, a private company may have the sole director, while the public limited company needs two or more directors (Rosenfalck, 2013). In addition, the Directors Board becomes the only significant representative, if there is no existing controlling stakeholder in the company (Davies, 2010). Frequently, this situation appears in private companies (Rosenfalck, 2013). Furthermore, the directors of the company are trained to act their instructions or directions. For example, when there is a serious loss in the capital of the public company, directors have to gather an extraordinary general meeting not later than 56 days from the day of half or less capital reduction (Rosenfalck, 2013). According to Osemeke, (2014), failures and bankruptcies of the company are mostly to result in an ineffective directors board. In this context, the ineffective work of the board has been shown in a recent failure of big companies like Enron and HIH (Convill and Bagaric, 2004). Moreover, Davies (2010) said that directors should care and promote the company’s success and do independent actions. In fact, directors of public companies must be sure that they hire a competent company secretary (Rosenfalck, 2013). Among the main flaws of directors that have a direct effect on the company’s performance, according to Osemeke (2014) “lack of training and induction or irrelevant skills”, for example, it is the responsibility of directors to be professional, because company believes in their potential by choosing him to be the leader. When Directors perform in a successful manner, Osemeke (2014) thinks the company “enhances board independence and good corporate performance.” Hence, the directors will be able to create a clear, independent, and complete company policy to apply it as a vital duty of this position within the company.
Secondly, the auditors' duties are necessary to operate companies. Shortly, the roles of auditors have determined in evaluation of company’s accounting balance, because only they know the truth about the company. In this context, auditors can be internal or external. Although, both public limited and private companies often choose to combine these two types in practice.  ...Download file to see next pagesRead More
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