Parameters to Consider Before Joining as an Independent Non-Executive Director

Corporate Governance
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Running head: CORPORATE GOVERNANCE
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CORPORATE GOVERNANCE
Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Conclusion.......................................................................................................................................7
References........................................................................................................................................9
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CORPORATE GOVERNANCE
Executive Summary
There are various parameters which an individual should analyse before taking a decision to join
an organization as an independent non-executive director. In order to join the company as a
director it is very essential for an individual to gain idea regarding the duties, responsibilities and
competencies of a director. The competencies which are essential for a director are industry,
technical, legal and governance knowledge, strategic expertise, risk management abilities and
ability to manage people and achieve change. In case of Mr Chan, the Director of Finance of
Dim Sum Ltd in Hong Kong, it can be stated that he is suitable for joining as an independent
non-executive director in ABC International Ltd. owing to his high qualifications and
experiences at the higher level. It can be also stated that Mr Chan is also suitable for the post
owing to his relationship with the other member of the board. It is also important for MR Chan to
gain adequate knowledge regarding the functions of the audit committee of the organization in
order to join the company as a director. Mr Chan can also join ABC International Ltd as the
board structure which is followed in ABC International Ltd. is unitary board structure and the
board style which is followed in the company is management board style which will enable him
to effectively contribute to the growth of ABC International Ltd. ABC International Ltd. can be
also considered as ideal organization to join for Mr Chan owing to transparency and
accountability of the company which is evident from the disclosure of company information
through annual reports.
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CORPORATE GOVERNANCE
Introduction
Mr Chan has been approached by the Chairman of ABC International Ltd., Mr. Alan K.M. Yau
regarding joining the company as an independent non-executive director after he was introduced
to Mr Chan by Mr. Johnny Y.K. Ho, the Finance Director of ABC International Ltd. Mr Chan
currently is the Director of Finance in Dim Sum Ltd and is committee associate of Hong Kong
Institute of Certified Public Accountants. Current report focuses on the various parameters which
Mr Chan should consider before deciding whether to join the company as an independent non-
executive director.
Discussion
Duties, rights and competencies of a director
The rights of a director are as follows:
 The right to obtain records in possession of firm regularly to facilitate functions of the
role.
 The right to investigate archives and financial reports of company for a proper purpose.
 The right to be insured across accountability for breaches in contract in some situations.
 Reliance on information and advice.
The responsibilities of a director are as follows:
 Perform in conformity within structure of company and exert power for objective of
which they were given.
 Promote success of company for advantage of its associates.
 Exercising independent judgement and making their own decisions
 Exercising reasonable care, skill and diligence regarding carrying out day to day
responsibilities
 Avoiding conflict of interests in any situation
 Not accepting any kind of advantage from third parties
 Confirming engrossment in prospective or current transactions or agreement within
company
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