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Governance and Management Control

Ethics

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WuBu Sakai
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10 views

Governance and Management Control

Ethics

Uploaded by

WuBu Sakai
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Shareholders

- Shareholders are the owners of the company. They have limited involvement in day-to-day operations
but play a key role in major decisions.

- Their main responsibility is to elect board members who will act on their behalf to run the company
effectively.

- They approve big moves like selling or buying shares and review reports about executive performance
and pay. This ensures the company remains accountable to its owners.

2. Board of Directors

- The board is the governing body of the company. They act as the link between the shareholders and
the management team.

- Their job is to ensure the company operates ethically, responsibly, and in alignment with its goals.

Responsibilities:

Operations:

- They set the company’s direction, defining what the organization stands for and how it should act
(mission, vision, values).

- They hire and evaluate the CEO and other top executives, ensuring the company has the right
leadership.

- They handle crises, communicate with shareholders, and recommend important appointments like
auditors.

Performance:

- The board creates strategies, monitors progress, and ensures the company achieves its goals.

- They approve budgets, track financial health, and oversee major projects or investments.

- They manage risks and adapt to industry changes.

Compliance:

- They make sure the company follows laws and regulations.

- They approve financial and public reports to ensure transparency.

- They maintain control systems to prevent fraud or mismanagement.

3. Non-Executive or Independent Directors


- These are board members who are not involved in daily operations, giving them an unbiased
perspective.

- They help the board by offering their expertise and ensuring decisions are made in the company’s best
interests.

Responsibilities:

- They stay informed about the company’s operations, finances, and environment to contribute
meaningfully.

- They do not manage or audit directly but provide oversight and guidance.

- They prepare for meetings, ask critical questions, and ensure accountability.

4. Management

- Management runs the company’s daily operations and is responsible for executing the board’s plans.

- They act as the middle layer, connecting the board’s strategy with the ground-level actions.

Responsibilities:

- They turn the strategic plan into reality by managing the company’s resources effectively (e.g.,
employees, finances).

- They ensure compliance with laws and regulations.

- They manage risks, monitor trends, and adjust operations as needed to stay competitive.

- They provide regular updates and reports to the board and stakeholders to ensure transparency.

Key Takeaway:

Shareholders: Owners who oversee big decisions.

Board of Directors: Leaders who set goals, monitor progress, and ensure accountability.

Non-Executive Directors: Advisors who provide independent oversight.

Management: Executives who handle day-to-day operations and report to the board.

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