Essay: Examining the Role of Boards in Corporate Governance

This essay provides a detailed analysis of the role of boards in corporate governance. It begins by defining corporate governance and its importance in achieving organizational goals and objectives. The main body of the essay explores the various responsibilities of boards, including ensuring shareholder rights, reviewing performance, and promoting transparency. It differentiates between executive and non-executive boards, highlighting their respective roles and contributions. The essay also discusses the importance of board committees, such as audit and remuneration committees, in maintaining ethical standards and effective governance. Furthermore, it emphasizes the board's role in setting strategic objectives, monitoring risk, and fostering a positive environment for corporate success. The essay also highlights the significance of communication, stakeholder engagement, and the alignment of executive compensation with long-term company interests. In conclusion, the essay underscores the critical role of boards in shaping corporate governance, promoting accountability, and driving sustainable business development.

Essay
On Role Of Boards In
Corporate Governance
1

INTRODUCTION
Corporate governance is considered as combination of diverse relationship between
company's management, board of directors, shareholders and other stakeholder. With an
assistance of this, organisations can easily accomplish goals and objectives and leads business to
impressive level of success. Overall performance of organisation can also be improved in
optimistic manner by monitoring of process. Management focuses on decisions to enhance the
contribution of firm to the economic development (Adams, 2008). Relationship with diverse
members can be improved and make sure that the financial market, institutions are providing
great support to development. There are number of principles that need to be consider by
organisations for sustainable development. Management need to ensure that the rights of
shareholder and key ownership functions are properly maintained.
MAIN BODY
It is significant for boards to make sure that they are having activities in appropriate
manner which reflects the best interest of shareholders. Activeness of board members provides
an ability to enhance effectiveness of corporate governance. Number of activities are performed
by board members to meet the ethical standards for better dealing with diverse situations. It has
been identified that the committees and board provides an independent working to the
management so that goals and objectives can be accomplished in desired form. It is also
necessary for boards to have effective understanding of diverse skills and factors that helps in
dealing with conflict situations (De Andres and Vallelado, 2008). Board must have activities that
provides detailed review of performance so that challenge can be presented among management.
Board members needs to meet appropriate level of commitment in order to fulfil responsibilities
and duties. It has also been witnessed that the key role of chairperson and CEO should not be
held by the same person. Transparency factors need to be promoted by the board for sustainable
development of corporate governance. Good governance demands a process that serves outcome
in reasonable time-frame (Armstrong, 2010). Members also need to focus on identification of
diverse conflict situations and determine ways to overcome it in appropriate manner for effective
standardisation of corporate governance.
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As per the detailed study, the board of directors is referred as body that are elected or
appointed for collective accomplishment of activities that can enhance productivity of
organisation. It has been identified that the board of directors mostly have relationship with the
shareholders of the entity (Bebchuk, 2010). However, managers have detailed evaluation of day
to day functioning within organisation. Activities of boards are determined with a consideration
of power, duties and responsibilities which are delegated to corporate governance. Working of
boards have reference of laws that provide detailed reflection of overall development. There are
two types of boards which plays key role in development of corporate governance. Classification
of boards can be as executive and non-executive (Dyck, 2008). In addition to this, the executive
board focuses on selection of company strategic objectives and decides the leadership activities
so that standards can be maintained. Moreover, the effective supervision provided to the
management also strengthen to the organisation and meets criteria of corporate governance. On
the other side, the non executives are appointed on part-time basis and plays vital role in
performing diverse duties (Bebchuk, 2009). For example, the working of chairperson and
effective participation of member in different committee helps in meeting ethical goals and
objectives. Classification of committees can be as remuneration committee, audit committee.
It is also necessary to ensure that the selection of members is according to legal aspects
and they are chosen to meet goals. Consideration of legal factors enhances the relationship with
shareholders which is beneficial for sustainable corporate governance. One of key responsibility
of the individual being a part of board is to indicate the interest of shareholders as a group
(Bhagat and Bolton, 2008). These kinds of aspects enhance the morale of board members to
perform diverse organisational activities so that needs can be accomplished in desired form. In
order to have effective development of corporate governance the lawsuit can be file by
shareholder to analyse the level of performance and his duties.
One of key role of boards and committees is to build a positive environment so that goals
and objectives can be accomplished in desired form and lead business to impressive level of
success. They are performing number of activities that access the key aspects that can bring
success in the future. It is also significant for board to make sure about its working style so that
collective work style can be promoted in optimistic manner. It has been identified that the
coordinated team work provides an ability to meet goals in desired manner and create better
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opportunities in regard to corporate performance. It is also necessary for board members to make
sure that the duties are performed in appropriate manner so that business needs can be
accomplished in proper way (Tricker, 2015). Moreover, there is need for greater control over
corporate enterprises due to the advancement in concern regarding corporate failures. Effective
monitoring of activities is also essential in order to meet the goals and objectives and make sure
that the business is effectively having progress (Omran, 2009).
In addition to this, the establishment of vision, mission and values is significant as it
indicates the role of boards in corporate governance. Boards focuses on the determination of the
company vision and mission so that current operational activities can be completed effectively
and future development opportunities can be identified. In support of this, the evaluation of
values that need to be promoted for better corporate governance. Number of company policies
are being established so that goals and objectives can be achieved in desired form. It is also
necessary for committee and boards to consider strategy selection so that activities can be
performed in appropriate manner (Brickley, 2010). Review and evaluation of current and future
opportunities is need to be consider effectively. Moreover, the threats and risks in the external
environment can be also be identified. These kinds of activities facilitates in determining various
ways that can overcome issues in appropriate manner. Risk and strengths that relates with the
future aspects can also be assessed. Strategic activities need to be design in such manner that the
implementation activities are being accomplished effectively (Huse, 2008). One of key role of
board and committees is to determine the business strategies and plans that underpin the
corporate strategy. It is also significant for management to ensure that the organisational
structure is well maintained. It must holds the capability of implementation so that designed
activities or strategies can be employ in most suitable way.
Reflection of accountability to the shareholder is also one of critical role that helps in
development of corporate governance. Board of members have responsibility in regard to actions
that are related with the stakeholders. Members need to make sure that the communication
system is properly maintained so that effective sharing of information is accomplished within
organisation. Regular interaction with the stakeholder and shareholder is also essential because it
provides an ability meet goals and objectives (Kirkpatrick, 2009). It also promotes the
understanding aspects in appropriate manner by reflecting the interest of shareholders and further
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relevant stakeholders. Monitoring of relationship with shareholders is also significant because it
helps in understanding the aspects that plays vital role in development of corporate governance.
In addition to this, the members of boards focuses on the effective gathering of the
information and its evaluation so that strategies and activities can be designed in most suitable
manner. Promotion of goodwill also creates a better opportunity for corporate governance
development. Other than this, the selection and monitoring aspects need to consider in essential
manner so that goals and objectives can be achieved. With an improved level of focus on the
planning is also beneficial for the sustainable development of corporate governance (Ayuso,
2009). Aligning key executives and board remuneration with the longer term interest of the
company and its stakeholders. It also boosts the opportunities for the corporate governance and
leads business to impressive level of success. It is also necessary for members to make sure that
the formal and transparent work activities are being performed in order to promote positive work
environment. Nomination and election process transparency enhances the opportunities for the
corporate governance (Nini, 2012). Effective monitoring and management of work activities also
demands positive consideration. In addition to this, the management needs to ensure that the
misuse of the corporate assets is not being acquired in the firm. Concern activity also improves
morale aspects and helps in overcome potential conflicts that may influence business.
Restructuring of process and communication system is also advantageous for sustainable
development.
Furthermore, the boards and committees are designed in order to have proper monitoring
of activities so that effectiveness of corporate governance practice can be boosted. It is also
beneficial for the organisation to have changes in the practice as per needs so that standards of
corporate governance can be accomplished effectively. Board and committees are also formed to
ensure about the affairs that are essential for the organisation. It is significant for members to
reflect the trust so that activities can be performed in effective manner (Gill, 2008). Moreover,
the profit of the company can also be boosted by optimistic focus on the corporate governance.
Expenses of shareholders must be monitored in appropriate manner so that better opportunities
can be provided and lead business to impressive level of success. Number of laws and duties
must be considered by the boards so that burden can be reduced and responsibilities can be
accomplished in desired way (Abdullah, 2009). Members must have trust on the activities and
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ensure that the best interest of company and shareholders is provided. Building trust also helps in
overcome conflict situation and ensure that the activities are performed in appropriate manner.
Proper information about diverse skills is also essential because it assists in development of
corporate governance.
Board and committees have actions that promotes hiring, firing and assessment of
management performance. With an improved focus on monitoring of management activities and
their performance aspects the boards can easily promote the development of corporate
governance. Board also focuses on identification of various managerial activities that enhances
the positive elements and helps in meeting goals and objectives (Nini, 2012). Auditing of
activities need to be accomplished as per policies and standards so that business can have
impressive level of success. As per the analysis of the management performance, the boards take
decision for better future of organisation. Committees also have changes in actions as per
benefits and working of management. It (who)focuses on the bargaining power so that better
control on the CEO activities can be meet. With an improved focus on negotiation, successive
factors forces management to perform activities as per common interest. Select individuals for
Board membership and evaluate the performance of the management is one of key role under the
guidelines of the corporate governance (Ayuso, 2009). Effective review of activities and suggest
numerous actions is also significant because it helps in meeting goals and objectives. Board
members and committee also perform activities in order to review the company financial
controls. Effective reporting of system is also essential as it promotes the standards of corporate
governance. Consideration of various ethical standards that are followed by management need to
be evaluated by the board so that goals and objectives can be accomplished in desired way.
Various legal compliance programs can be arranged to make sure that the business is having
development of corporate governance (Kirkpatrick, 2009).
In addition to this, it can be said that the board focuses on number of factors that are
beneficial for effective promotion of corporate governance. It has been identified that the board
of members perform number of interaction activities so that better relationship can be built.
Improvement in relationship with members is also beneficial for enhanced engagement with
stakeholders. Meeting with government authorities helps in understanding legislative needs and
facilitates in effective designing of organisation policy. Discussion with investors is also
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beneficial for the organisation because it helps in attaining financial sources which will facilitate
in meeting standards of corporate governance. It is also necessary for company to have effective
focus on activities and ensure about the accountability. Every activity which is performed within
organisation must have responsibility of one individual so that work can be managed in
appropriate manner.
Board must take responsibility of further actions which are performed for development of
the organisation. If any kind of issue has occurred board members must make sure about it so
that goals and objectives can be accomplished. Other than this, number of policies in regard to
the ethics need to be designed so that work practice effectiveness can be improved. With an
improved focus on ethical work practice the board members can attain various advantages
(Ayuso, 2009). It is also significant for management to evaluate working of non executive
directors so that activities can be designed in appropriate manner for sustainable development.
Effective participation of non executive directors is also beneficial for corporate governance
because they provide great level of support at implementation stage.
As per the detailed study of corporate governance the board behaviour is focused towards
ethical aspects that are mostly classified into corporate agency and social welfare. In other
aspect, the board members ensure that the ethical factors are maintained in both corporate aspect
as well as social. In respect to the corporate aspect, the board members must behave in the best
interests of owners or shareholders (De-Andres and Vallelado, 2008). It is necessary to make
sure that the key needs of shareholders and other stakeholders are properly concerned so that
ethical work conditions can be promoted in appropriate manner. Ethical standards must be set
out by the governing authorities of board in order to make sure that the waste of resources is
being reduced. These kinds of behavioral aspects in board members are beneficial to promote
ethics in corporate governance. Board also behaves number of activities as per ethical standards
to promote transparency aspect at work place (Gill, 2008). Members of board, acting in ways that
look good to shareholders and create value for long term. Moreover, Social welfare is based on
the premise that companies should engage in fair dealing with all of its stakeholders.
Classification can be as customers, employees, suppliers and communities. Board also has
behaved as per social needs so that better satisfaction can be rendered to the customers.
Consideration of stakeholders is also significant for board because it helps in meeting their
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expectations effectively (Ayuso, 2009). Members of board also focuses on activities that create
fair trade aspects and lead business to impressive level of success. Board also need to behave in
such manner that ethical elements can be promoted effectively. Councils and commission must
be designed to make sure about diverse social, ethical and discrimination issues.
In addition to this, it can be said that the board members key behaviour is to manage the
activities that can lead business to impressive level of success. Members monitor the working of
organisation and make sure that the roles and responsibilities are considered by management and
employees in appropriate manner. Board is also focused towards establishment of the vision,
mission and values so that business can have diverse activities accomplishment. Determine the
company's vision and mission to guide and set the pace for its current operations and future
development. Members are also focused towards creating a value that promotes business to the
next level (Nini, 2012) As per the detailed study, the corporate governance is also essential for
effective promotion of ethics. It has been identified that the management uses corporate
governance to set out various ethical standards at the work place. These kinds of activities are
beneficial for sustainable development and promote ethics in appropriate manner. It has also
been noticed that the corporate governance promotes number of legal compliance mechanism
within organisation. Promotion of legal compliance leads business to sustainable development
and allows ensuring that the legal aspects are properly considered. Responsibilities are also
allocated under consideration of policies because it provides strength to organisational
frameworks (Abdullah, 2009). Board responsibilities covers number of code of conducts such as
ethics certification, ethics recertification, foreign corrupt practices act and compliance program.
These kinds of consideration under corporate governance help in promoting ethics and provide
fair working to the organisation.
CONCLUSION
As per the above essay, it can be concluded that the corporate governance plays a vital
role in development of organisation. It has been identified that the boards mainly focuses on
activities that boosts the effectiveness of corporate governance. Monitoring of management
actions is considered as activity that enhances ethical standards and legal reference (Huse, 2008).
It is also beneficial to meet the goals and objectives in appropriate manner and lead business to
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further developments. Monitoring of relationship with shareholders and employee's promotes the
sustainability of the corporate governance. Board members also have responsibility to have
conversation with investors so that financial crises issues can be overcome in optimistic manner.
Moreover, for sustainable development board needs to behave in suitable manner along with
various considering corporate and social aspects. It has been identified that the corporate
governance activities of organisation must be designed to ensure that the fair trade policies are
adopted for meeting industrial standards. Other concern policies such as discrimination, equality
must be considered in appropriate manner for effective promotion of ethical aspects.
Transparency must be promoted in work environment so that business can have further
developments. Effective monitoring of activities is also one of essential role of board which
facilitates in meeting ethical and other industrial standards.
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REFERENCES
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Gill, A., 2008. Corporate governance as social responsibility: A research agenda. Berkeley J.
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Huse, M. ed., 2008. The value creating board: Corporate governance and organizational
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Kirkpatrick, G., 2009. The corporate governance lessons from the financial crisis. OECD
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Nini, G., 2012. Creditor control rights, corporate governance, and firm value. Review of
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