Summary the artical - Assignment Example

Summary of Article on Corporate Directors, Officers, and Shareholders The modern business corporation is usually run by a board of directors whose executives are answerable to the business’s stakeholders. Each corporation has a set of regulations that stipulate how the directors are selected. Most businesses follow the credo that that there should be at least three directors in any board. Each of the directors is usually appointed to one year terms. In cases where the stakeholders encourage it, directors may be elected to serve for at least three years.

Directors remain subject to their stakeholders. They can be removed from office for not delivering the expected results. There are special circumstances in which stakeholders are forced to elect new directors mid-term. For instance, if one of the directors passes away, stakeholders can consult state law while seeking to appoint a new director. For formal meetings to be held there has to be a quorum of officials before the conducting of any transactions. In any corporation, the members of the board of directors have different rights.

They have the right to participate in all business meetings and operations, carry out inspections, indemnification, and compensation. They serve the stakeholders by furnishing them with corporate dividends, ratifying major organizational policies, overseeing the process of hiring and firing corporate personnel, and determining financial decisions.Below the board of directors in a company’s hierarchical structure are the corporate executives and officers. Corporate officers are expected to be familiar with the rules and regulations of their corporation as they are often tasked with delegating different tasks to other corporate workers.

Their responsibilities are quite serious as they can be penalized for mistakes that they or their workers commit.Shareholders are the individuals who own the corporation. They do not take part in running the daily operations of the corporations they invest in but can effect serious changes in terms of the hierarchical structure as well as executive appointments. They exercise their powers by voting for their preferred candidates. Shareholders may hold certificates that outline their ownership status, and are usually awarded stock warrants, pre-emptive rights, dividends, and inspection rights.

ReferenceAl-Salloum, A. (2006) ‘Corporate Directors, Officers, and Shareholders’ in Business organizations, Aspen, New York. Summary of Article, ‘The Case for Professional Boards’Professional boards serve a distinct purpose when they are included in different organizations. The collapse of respected financial business establishments triggered a global recession that adversely affect many global citizens and underscored the need for more stringent management of business enterprises.The American financial institutions that collapsed each had professional boards that were populated with numerous officials.

This shows that numbers do not necessarily protect a corporation’s decision to act with integrity. What would be more efficient is a small number of professional board members each of whom is exceptionally talented in their various disciplines. It is also important for large corporations such as multinational enterprises to invest in independent officials when determining on the best individuals to be included in professional boards.This is important because an independent board member will not be afraid to ask uncomfortable or controversial questions when he or she senses that things are amiss.

It is also important for corporate executives to decide on professional board members who have the time to invest in conducting full inspections of corporation(s) in question. It is unlikely that investing mere hours every few months will be sufficient for a professional board member to audit the true operations of a corporation. According to Pozen (2010), investing in an independent professional board director could be extremely taxing, though. This is because the individuals who are qualified enough to serve in this position usually have many other responsibilities.

They could also prove to be an extremely expensive investment. There would also be the need to determine the responsibilities of the independent directors so that they understood that they were not required to involve themselves in other interests such as employees’ concerns. The only way in which members of the board of directors can successfully commit to overseeing operations would be if an appropriate culture of governance were inspired so that the board members felt duty-bound to commit to fulfilling their primary roles as inspectors who ensure that company resources are not misused, and stakeholders’ interests remain at the fore-front in all circumstances.

ReferencePozen, R. (2010) ‘The case for professional boards’, Harvard Business Review, pp. 51-55.