Corporate Governance Article Review: Board Duties and Responsibilities

This report provides a comprehensive review of an article concerning corporate governance, specifically examining the duties and liabilities of a company's board of directors. The review highlights the board's dual mandate, encompassing advisory and oversight roles, and emphasizes its independence from management. Key responsibilities discussed include approving corporate strategy, monitoring performance, managing risk, selecting executives, designing compensation, ensuring financial integrity, and protecting company assets and shareholder interests. The report further delves into the legal and fiduciary requirements, including the duty of care and the duty of loyalty, that the board must uphold. The article underscores the board's accountability to shareholders and its crucial role in fostering corporate governance, ethics, and social responsibility. The review references various scholarly sources to support its analysis of the board's functions, independence, and legal obligations within the corporate structure.

Running head: CORPORATE GOVERNANCE – ARTICLE REVIEW
CORPORATE GOVERNANCE – ARTICLE REVIEW
Name of the Student
Name of the University
Author Note

1CORPORATE GOVERNANCE – ARTICLE REVIEW
The following paper attempts a review of the given article that deals with the duties and
the liabilities that needs to be maintained by the board of directors of the organization. The paper
discusses the duties and the responsibilities of the board of directors alongside the functionalities
that need to be maintained by the board of directors that is existent within the organization. the
paper further discusses the independence as is maintained by the board and the legal and the
fiduciary requirements as are maintained by the organizational board of directors.
The purpose of the board of directors within the given organization is considered to be
advisory as well as oversighted in nature. The article attempts a discussion on the various roles
and responsibilities of the board of directors. The major function of the board of directors refer to
the activities that are required for the smooth functioning of the given organization (Unda, 2015).
The board of directors within the company is considered to be responsible for looking into the
issues that are faced by the concerned organization in discussion. The board is directly
answerable to the shareholders of the company. The major purpose of the board of directors is to
ensure the proper improvement of the prosperity of the company through the maintenance of the
directions of the affairs undertaken by the company in a collective manner. The board of
directors are also observed to have been discussing the issues that are presented on behalf of the
wishes and the demands of the various internal and external stakeholders within the organization
(Fernández-Gago, Cabeza-García & Nieto, 2016). The board of directors are also responsible for
the issues that are presented in the matters that are highlighted by the major shareholders of the
organization. The board of directors within an organization is also responsible for the
development of the corporate governance, the corporate ethics and the corporate social
responsibility that needs to be maintained within the given organization.

2CORPORATE GOVERNANCE – ARTICLE REVIEW
The functionalities of the board of directors within a given organization is majorly based
on the development of the company in the achievement of the activities of the organization. The
board of directors within the organization tend to deal with the management, representation,
supervision of the activities within the workforce of the organization (Gsb.stanford.edu., 2019).
The board of directors within the organization however is not responsible for the management of
the organization as a whole. The board is known to have been independent in their activity
towards the development of the overall performance of the company (Fuzi, Halim & Julizaerma,
2016). The board of directors of the organization are known to have been operating in the
accomplishment of the missions and the goals that have been set by the concerned management
of the organization. The board of directors within the organization is presided by the chairman of
the organization (Fuente, García-Sanchez & Lozano, 2017). The board of directors within the
organization is also held responsible for the development of the setting of the agenda, the
scheduling of the meeting, and the coordination of the actions that have been undertaken by the
members of the various committees within the organization.
The board of directors within an organization is known to have been independent in
nature as well as their activities within the organization. the board of directors within the
organization is held answerable to the shareholders and the chairman of the organization. The
only involvement of the board of directors with the organization in discussion is through the role
of the directors of the organization. The board of directors within the company is considered to
be responsible for looking into the issues that are faced by the concerned organization in
discussion (Liao, Luo & Tang, 2015). The board is directly answerable to the shareholders of the
company. The major purpose of the board of directors is to ensure the proper improvement of the
prosperity of the company through the maintenance of the directions of the affairs undertaken by

3CORPORATE GOVERNANCE – ARTICLE REVIEW
the company in a collective manner (Tulung & Ramdani, 2018). The independence of the board
of directors within the organization refer to the independence in the decision-making and
overviewing of the activities that are presented within the performance of the company in the
given market. The board of directors of an organization maintains the independence in terms of
the accomplishment of the factors highlighted by the shareholders of the organization.
The legal requirements of the organization tend to deal with the incorporation of the
issues that are presented in terms of the legal issues that are presented within the organization in
discussion. The major issues that are faced by the organization within the given market refer to
the issues that are presented in terms of the legal factors that are active within the area. The
board of directors within the organization should comply to the fiduciary duty as is presented
within the state corporate law (Sale & Langevoort, 2016). The business organizations should
maintain the “duty of care” that is presented to the board of directors as is present within the
organization (Gsb.stanford.edu., 2019). The implementation of the fiduciary responsibilities on
the board of directors of the company refer to the conditions wherein the concerned board
members within the company might have to deal with the due amount of deliberation within the
company (Kraakman & Hansmann, 2017). The fiduciary duties of the board of directors tend to
discuss the “duty of loyalty” within the organization (Gsb.stanford.edu., 2019). This involves the
activity of the directors in preference of the interest of the stakeholders of the organization,
especially the major shareholders of the company.
Thus, from the above discussion it might be stated that the article portrays the duties and
the responsibilities of the board of directors of any given organization. The board of directors
within the company is considered to be responsible for looking into the issues that are faced by
the concerned organization in discussion. The board is directly answerable to the shareholders of

4CORPORATE GOVERNANCE – ARTICLE REVIEW
the company. The board of directors within the organization should comply to the fiduciary duty
as is presented within the state corporate law. The board of directors within the organization
however is not responsible for the management of the organization as a whole.

5CORPORATE GOVERNANCE – ARTICLE REVIEW
References
Fernández-Gago, R., Cabeza-García, L., & Nieto, M. (2016). Corporate social responsibility,
board of directors, and firm performance: an analysis of their relationships. Review of
Managerial Science, 10(1), 85-104.
Fuente, J. A., García-Sanchez, I. M., & Lozano, M. B. (2017). The role of the board of directors
in the adoption of GRI guidelines for the disclosure of CSR information. Journal of
Cleaner Production, 141, 737-750.
Fuzi, S. F. S., Halim, S. A. A., & Julizaerma, M. K. (2016). Board independence and firm
performance. Procedia Economics and Finance, 37, 460-465.
Gsb.stanford.edu. (2019). Board of Directors: Duties and Liabilities. Retrieved from
https://www.gsb.stanford.edu/faculty-research/publications/board-directors-duties-
liabilities
Kraakman, R., & Hansmann, H. (2017). The end of history for corporate law. In Corporate
Governance (pp. 49-78). Gower.
Liao, L., Luo, L., & Tang, Q. (2015). Gender diversity, board independence, environmental
committee and greenhouse gas disclosure. The British Accounting Review, 47(4), 409-
424.
Sale, H. A., & Langevoort, D. C. (2016). We Believe: Omnicare, Legal Risk Disclosure and
Corporate Governance. Duke LJ, 66, 763.
Tulung, J. E., & Ramdani, D. (2018). Independence, size and performance of the board: An
emerging market research. Corporate Ownership & Control, 15(2).

6CORPORATE GOVERNANCE – ARTICLE REVIEW
Unda, L. A. (2015). Board of directors characteristics and credit union financial performance: a
pitch. Accounting & Finance, 55(2), 353-360.