Role and Responsibilities of Board of Directors in Protecting Shareholders' Interests

1.The Board of Directors act on the behalf of its shareholders to run the daily affairs of the
business. The board of directors are directly responsible to its shareholders for which the
company holds annual general meeting in which they present annual report in front of its
shareholders on the performance of the company, strategies, its future goals and objectives and
also for the re election of its board members. The main aim of the board is to ensure the
company’s progress by directing its daily affairs which protects the interests of its stakeholders
and shareholders.
In my opinion the directors of the company should act in the following way to protect the
interests of its shareholder which are:
 Proper and effective communication towards or from the shareholder and relevant
stakeholders
 Need to understand work according to the interest of the shareholders and stakeholders’
 The monitoring of relation with the stakeholders and shareholders by collecting and
evaluation relevant information.
 Promotion and encouragement of support and goodwill of its shareholders and relevant
stakeholders.
 The director must always take decisions towards the interest of the company, not for any
collateral purpose. In other words, especially if there is any conflict of interest between
their own conflict and company’s interest, the directors should always favor the
company.
 The director should always exercise competence and caution in every situation like a
reasonable person would do under such circumstances.