DIRECTORS-1.pptx

STRUCTURE OF BoD...
 CHAIRMAN: A chairman leads the board and thus heads
the committee or board meetings. The BOD votes and elects
the chairperson. Usually, the company’s chief executive
officer is the chairman.
 EXECUTIVE DIRECTOR: Such an individual takes active
participation in the company’s activities .An executive
director is a part of the board and even gets a salary for the
company. Managing Director: A managing director is an
individual elected by the company’s executive directors to
manage, guide, and monitor business functioning.
 NON EXECUTIVE DIRECTORS : A non-executive
director doesn’t belong to the organization but is a part of the
board. Such directors provide critical opinions and advice by
charging a certain fee.

 MEANING OF BoD : In a company, a board of directors is a
group of elected individuals representing the shareholders.
 The primary job of board of directors is to look out for the shareholders’
interests. Board members supervise the company’s activities and
evaluate its performance.
 A good board of directors should represent both shareholder and
management interests and have internal and external non-executive
directors.
 The board of directors are can be called the brain of the company.
They are responsible for taking all the big decisions and making
policy changes. These decisions are taken in special meetings
members of the board hold together, called ‘Board Meetings’.
 Section 149 of the Companies Act states that every
company’s board of directors must necessarily have a minimum of
three directors if it is a public company. two directors if it is a
private company and one director in a one person company.

 Corporate boards have many duties and responsibilities. In
every decision the board makes, they must consider how it will
affect their employees, customers, suppliers, communities and
shareholders.
 Good corporate governance relies on distinct differences in the
roles between board directors and managers. It was never
intended for board directors to be directly involved in the daily
operations of a corporation, and they certainly shouldn't engage
in micromanaging the management. The main role of board
directors is oversight and planning. Despite the differences,
board directors may delegate certain powers to the CEO or CFO
under certain circumstances.
 Boards also regularly delegate some of their duties to board
committees. Corporate board committees act as a subset of the
full board. Committees devote the necessary time and resources
to issues for which the full board doesn't have time. Committees
delve deep into issues, often calling in experts to assist them.
Committees provide regular reports to the board on the matters

POWERS OF BoD
AND ITS ROLE IN
CORPORATE
GOVERNANCE….

 The functioning of the corporate governance is concerned mainly
with the Board of Directors. Directors are appointed by the
shareholders, who sets the overall policy for the company and
they appoint some persons to be the managing director/
executive director/ whole time director by the prior approval of
shareholders.
 The board's chief function is to monitor management on behalf
of the shareholders. The directors have to maintain a balance
between the conflicting interests of shareholders, promoters,
customers and directors. Therefore, they are the heart and soul of
a company.
 The Board of Directors key function is to ensure the company's
prosperity whilst meeting the appropriate interests of the
shareholders. However, the authority of the board is subject to
the limitations imposed by the Memorandum of Association,
Articles of Association of the company and the relevant
provisions of the Companies Act, 2013.

 The BoD assists in corporate governance by advising the
executive management and by taking strategic
decisions. The role and responsibilities of BoD vary
depending on nature business entity that works.
 Corporate governance refers to how a board directs and
manages the corporation , taking into account the impact of
decision on employes , customers , shareholders and
committies.
 The board of directors’ foremost responsibility or duty is
towards the company’s stakeholders. Here, the board
ensures that the company doesn’t risk the shareholders’
and investors’ assets. It frames policies for dividends ,
payouts, present their perspective to the organization, etc.
 Crisis management is perhaps one of the most crucial roles
played by a company’s BOD. When a company is in crisis,
the BOD gives it a shield as it represents the firm and is
accountable for its actions. Executives rely on the board’s
counsel when a crisis strikes.

STRUCTURE...
 In India, the constitution of audit committees is deemed mandatory
for listed companies as stated under the Companies Bill, 2009 and
the SEBI Act. The Companies Bill requires every listed company to
have an audit committee that comprises a minimum of three
directors with independent directors forming a majority with at
least one of them with expertise and knowledge in financial
management, audit or accounts. The norms to be followed while
forming an audit committee according to SEBI has been given
below.
 An audit committee must comprise a minimum of three directors
as its members.
 Two-thirds of the total number of an audit committee’s members
must comprise of independent directors.
 Every member of an audit committee must be financially
knowledgeable with at least one of the members having
accounting or related financial management expertise.
 An independent director must be appointed as the Chairman of an

INTRODUCTION:
 An audit committee is one of the major operating
committees of a company's board of directors that is in
charge of overseeing financial reporting and disclosure.
 Audit Committee is of the major operating committees
of a company’s Board of Directors that is in charge of
seeing the financial reporting and disclosures. It is
important for a company to comply with the financial
reporting standards and disclosures to various
government undertakings.
 The audit committee should consist of members having
knowledge of finance and accounting. The duties of an
audit committee are to oversee the preparation,
presentation, and reporting of financial statements of a
company.

 The audit committee ensures that appropriate policies and
processes are in place for the prevention and identification
of fraud, such as asset misappropriation, corruption, and
financial statement fraud. The audit committee works with
management to make sure that necessary steps are taken
on the detection of fraud
 The audit committee assesses the analysis of important
issues and judgments made by management in the
financial reports. The effects of accounting and regulatory
initiatives on the financial statements are also reviewed by
the audit committee.
 The audit committee administers the financial reporting of
a company and related risks, internal controls,
compliances, and ethics.
 An audit committee is required by stock exchanges, so
publicly held entities that want their securities to be traded
on an exchange must have an audit committee that meets
the requirements of the relevant exchange.

MAJOR ROLES OF AUDIT
COMMITTEE.....
 GENERAL ROLE : The audit committee’s composition,
competence, independence, and expertise are strongly correlated
with the organization’s corporate governance. The audit committee
reviews the organization’s annual, quarterly, and monthly reports; it
issues its reports and recommendations to the board of directors;
and annually issues a report submitted to the shareholders (as part
of the organization’s annual report) describing its activities and
responsibilities during the year. The audit committee has
relationships with almost all of the organization’s stakeholders as
well as the governing and regulatory bodies .
 ROLE IN INTERNAL AUDITING : The auditing
committee shall monitor the effectiveness of company’s internal
audit where applicable. The audit committee is concerned with
recruiting and terminating the head of the internal audit, and the
frequency and duration of the meetings with the internal
auditors, as well as ensuring that the internal auditors, especially
their head, can communicate directly with the audit committee
anytime.

Independence and financial expertise are very critical for the audit
committee to play its important role and take advantage of the
internal auditors’ performance.
 ROLE IN INTERNAL CONTROL :Internal control
structure includes policies, procedures, and practices followed
by the organization to control its operations, particularly its
financial part, and to ensure the organization’s compliance with
the valid and relevant laws and regulations, as well as the
organization’s own bylaws and resolutions.the audit committee
shall monitor the effectiveness of the company's internal control.
The committee has full authority to investigate about any issue
which may affect the organization’s internal control and financial
reporting.
 ROLE IN EXTERNAL AUDIT : the auditing committe plays
a major role in selecting the extertnal auditors since it nominates
them, asks them to submit their proposals regarding the audit
process, then it recommends to the organization’s board of
directors whom it sees are the best to perform the external audit
. The audit committee also facilitates the communications
between the external auditors and the organization’s board of
directors and attends their relevant meetings.

the committee members discuss such reports with the
concerned parties, and make sure that the valid notes are
taken into consideration and executed by the management.
 ROLE IN FINANCIAL REPORTING AND
ACCOUNTING : It reviews the organization’s financial
statements monthly, quarterly, and/or annually according to
the organization’s size, system, and nature of business.
The role of audit committee in exercising an active
monitoring of the organization’s financial reporting process
is well established and confirmed by many corporate
governance codes. The audit committee interacts regularly
with the organization’s chief financial officer, controller, and
finance manager, and report on the capabilities and
competence of these managers.
 RISK MANAGEMENT : The audit committee
discusses with the organization’s management the policies
and practices used to identify, prioritize, and respond to the
risks that threaten the achievement of the organization's
objectives or opportunities that enhance the achievement

TYPES OF AUDITING....
 Internal auditors are
employed by the company or
organization for whom they
are performing an audit, and
the resulting audit report is
given directly to management
and the board of directors.
 The purpose of an internal
audit is to ensure compliance
with laws and regulations and
to help maintain accurate and
timely financial reporting and
data collection.
 External auditors follow a
set of standards different
from that of the company
or organization hiring them
to do the work.
 When audits are
performed by third parties,
the resulting auditor's
opinion expressed on
items being audited can be
candid and honest without
it affecting daily work
relationships within the
company.
INTERNAL
AUDIT
EXTERNAL
AUDIT

DISCLOSURE IN CORPORATE
GOV.
 Disclosure is the process of making facts or
information known to the public. Proper disclosure
by corporations is the act of making its customers,
investors, and any people involved in doing
business with the company aware of pertinent
information.
 Disclosures are at the center of the public's crisis of
confidence when it comes to the corporate world.
They should be viewed as a very important and
informative part of doing business with or investing
in a company.

IMPORTANT POINTS OF
DISCLOSURE
1. FINANCIAL INFORMATION - It is important that the
financial and operating results of an organisation are prepared and disclosed
in an easily understood manner. It should also be borne in mind that
theinformation is used both outside and inside the company.
An organisation must fully disclose to the market all material related to
transactions
with related parties and indicate whether the transactions were executed at
armslength and on normal market terms.
In addition to financial information, organisations should disclose policies
relating to
business ethics, the environment and other public policy commitments, as
this
information can be important to investors and others in better evaluating the
relationships between companies and the communities in which they operate.
2. RISK An organisation should disclose all important risk factors and its
anticipated

‘
.
reaction. That may include risk specific to the industry or
geographical areas in which the organisation operates,
financial market risk, risk related to funding and risk related to
environmental liabilities.
3. STAKEHOLDERS RELATION - Investors
should be informed about the organisational ownership
structure, voting rights, governance structure and policies.
Such information should make transparent the objectives,
nature and structure of the organisation.
Remuneration policy for members of the Board and key
executives, as well as information about the Board members,
should be disclosed. Information should describe their
backgrounds and whether they are regarded as independent
by theBoard.
Information should be disclosed on key issues relevant to the
organisation’s market position and issues related to corporate
citizenship.

COMPLIANCE AND
CORPORATE
GOVERNANCE....
 Corporate governance practices are the rules, policies and
procedures established by the corporate officers at the helm
of a company to direct its activities and manage risk.
 Good corporate governance policies ensure that the
strategies and directives developed under the corporate veil
meet the ethical standards and fiduciary duties of the
company’s compliance environment.
 Compliance, in contrast to corporate governance, refers to
meeting a company’s legal and regulatory compliance
requirements as dictated by their industry, activities and
jurisdiction.
 If corporate governance are the principles that guide action,
corporate compliance is the group of practical actions
required to participate in the business environment. This
means making sure that business practices line up with
government mandates, which often requires consultation with
outside specialists.

 Corporate governance and compliance are closely
linked, as they usually fall under the umbrella term of
governance, risk management and compliance (GRC).
However, they are each different components of
corporate success in both private and public companies.
 Corporate governance takes a long-term view, focusing
on improving business performance in the future.
Compliance considerations are much more practical in
nature, as companies can have a wide variety of rules
and regulations to comply with in order to offer their
products or services.
 Compliance policies are required so that businesses can
meet regulatory requirements and operate without
running afoul of the law.
 Essentially, governance policies are important, but not
absolutely necessary, while corporate compliance is an
absolute necessity to avoid potentially crippling legal

compliance....
 MEANING : For most, it’s about following the rules
and avoiding legal trouble. And they’re not wrong.
Compliance in business is essentially about doing
things the right way, both in accordance with
industry regulations and government
legislation.Compliance is the state of being in
accordance with established guidelines or
specifications, or the process of becoming so.
 TYPES OF COMPLIANCES : Just as there are so
many parts of a business that must be conducted
in the right way, and many types of business, so
there are different types of compliance in
business.

1. REGULATORY COMPLIANCE-
2. HR COMPLIANCE
3. DATA COMPLIANCE
4. HEALTH AND SAFETY COMPLIANCE
WHY CORPORATE COMPLAINCE
IMPORTANT FOR A BUSINESS ?
1. To avoid criminal charges
2. Improves public relations
3. Improved operations and safety

 REGULATORY COMPLIANCE : Regulatory compliance
is when a business follows the local and international
laws and regulations that are relevant to its
operations. Depending on the business and the
industry it’s operating in, the requirements of
regulatory compliance will vary. Regulatory
compliance ensures your company is following the law
so that trust can be established. As your company’s
reputation improves, you can watch your business
grow.
 HR COMPLIANCE : HR compliance covers all
the business policies and procedures that ensure your
organisation is operating lawfully and with the welfare
of your employees at the forefront of everything you
do. The types of compliance in HR ensure your
business complies with employment laws and
employee-related concerns.

HR compliance covers topics such as: maintaining
employee documentation, hiring procedures, how
and when to pay overtime, recruiting, and employee
benefits. When your company is compliant with
these HR procedures, you are more likely to have a
happy and productive workforce and you are far
less likely to be faced with HR complaints or legal
issues.
 DATACOMPLIANCE: Data compliance ensures that
your organisation is correctly and legally collecting,
organising, storing, and managing data. If your
business is data compliant, all your data must be
guarded against corruption, loss, theft, and
misuseData is the fuel of decision making,
continuous improvement, quality and demonstration
of clinical value. Data is to an organisation what fuel
is to a car. If the fuel is contaminated, it damages

If the integrity of the data is at risk, it can damage
the organisation’s reputation and can even lead to
the extent of business shutdown.”
 HEALTHAND SAFETY COMPLIANCE : health and safety
compliance is not just relevant to those working in
the healthcare industry, it extends to all
businesses and industries. This is because a big
part of health and safety compliance is about
providing a safe working environment. This
ensures your employees can safely work to the
best of their abilities, without being put in danger
or at risk of injury. Failing to comply with health
and safety regulations can be detrimental,
resulting in serious accidents , ill health, and
avoidable incidents in the workplace.

PREPARED BY :
1. JASKARAN 044
2. VAIBHAV GOYAL 048

DIRECTORS-1.pptx

More Related Content

What's hot (20)

Similar to DIRECTORS-1.pptx (20)

Recently uploaded (20)

DIRECTORS-1.pptx