StudentShare solutions
Triangle menu

Non-Executive Directors in Corporate Governance - Essay Example

Not dowloaded yet

Extract of sample
Non-Executive Directors in Corporate Governance

The need for altering the corporate governance and the accountability of non-executive directors has come forth due to the collapse of a number of high profile corporations ( Carver and Oliver 2002; Cadbury 2002; Vinten 2002; Taylor 2003).
Oman (2001) tried to define corporate governance as the public and private establishments which includes polices, rules and consented business patterns, which based on the economy of the market economy, administer the relationship linking internal stake holders on one hand, and share holders on the other. According to Cochran and Warwick (1988) corporate governance is: "an umbrella term that includes specific issues arising from interactions among senior management, shareholders, boards of directors, and other corporate stakeholders."
'Corporate governance' is seen as a fresh term which has entered our business terminology particularly in the last decade. Nevertheless connecting accountability with corporate governance (Cadbury 1992) is not a recent issue; it has grown with the development of the capitalistic system and growth of world economies (Vinten 2003). The different issues to be considered in this paper are: accountability and the role of non-executive directors with regard to corporate governance and accountability.
According to Sir Arthur Cadbury in his paper (Cadbury 1992, p.15) "Corporate governance is the system by which companies are directed and controlled". This is concerned with the institution of structures and procedures by which management is responsible to shareowners with the aim of raising shareholder worth. The OECD (2004, p.11) defines as "Corporate governance involves a set of relationships between a company's management, its board, its shareholders and other stakeholders. Corporate governance provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. Good corporate governance should provide proper incentives for the board and management to pursue objectives that are in the interest of the company and its shareholders and should facilitate effective monitoring."
A single structure or form is not suitable for all kind of businesses. This is actually acknowledged by the OECD rationales (2004 p.13). The reason is not only the intricacy and variety of actions that businesses are concerned with but also the lawful effects reckoning on the country's legal power and other social and cultural matters.
Corporate performance and analysis
Majority of research work have been carried out trying to connect company operation with different factors like board independence (Bhagat and Black 2002). Most of these studies undertaken actually surveyed the 'for-profit organizations' and made use of the common operation indicants like profit margins, share value and ROI.
Research on the effect of corporate governance in organizations is mainly concentrated with the use of quantitative data analysis, whereas corporate ...Show more

Summary

The role and liability of the board and directors has come forward as a crucial matter in probing the reason of high profile crumples like Enron, Parmalat, One.Tel, WorldCom and HIH. This has produced a lot of debate on what the part of the directors is in 'monitoring', 'directing' or 'advising' a company…
Author : prosaccocyrus
Non-Executive Directors in Corporate Governance essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Non-Executive Directors in Corporate Governance"
with a personal 20% discount.
Grab the best paper

Related Essays

Corporate Governance and Non-Executive Directors: A Good Start But Not Enough
This paper argues that whilst there have been some measures put in place as a result of the assumption of non-executive directors, there still are a plethora of issues and problems that need to be addressed and resolved, including the degree to which directors can be held liable for wrongdoing and the existence of mechanisms to ensure redress for corporate malfeasance and misfeasance.
12 pages (3000 words) Essay
Corporate Governance: Role of non-Executive Directors
This therefore relatively gives non-executive directors (NED) independence to view and develop a different insight about the affairs of the firm. The presence of a NED provides board a balance in terms of voicing the concerns of all stakeholders while at the same time maintain independence of the board as a whole.
12 pages (3000 words) Essay
Role of Independent Non-Executive Directors
Running head: ROLE OF INDEPENDENT NON-EXECUTIVE DIRECTORS Role of Independent Non-Executive Directors [Name of the writer] [Name of the institution] Role of Independent Non-Executive Directors Introduction There are many definitions of "independent non-executive directors" of board members.
9 pages (2250 words) Essay
The Seeking of the Non-Executive Directors (NEDs)
Characteristically, in any corporate organization the full time executive directors possess extensive powers with reference to the dealings and matters of the organization they are paid to manage in support of the shareholders. Nevertheless, the executive directors might not always bear the interests of the shareholders in their mind while carrying out their executive responsibilities.
5 pages (1250 words) Essay
Explain the duties and responsibilities of the Non-executive Directors (NEDs) in the Corporate Governance process: a) within
This called on a more tenacious corporate governance to ensure that their defenses against corporate malfeasance are robust as they need to be to prevent similar occurrence in the UK. Such various initiatives were undertaken to review UK’s accounting regulatory practices to improve the regulatory practice in the accounting industry.
4 pages (1000 words) Essay
Explain the duties and responsibilities of the Non-executive Directors (NEDs) in the Corporate Governance process: a) within
This entails the inclusion of Non-executive Directors or NEDs in the company board of Directors in the process of promoting good corporate governance. NED’s authority is derived from UK Corporate Governance Code that defines the legal framework of its inclusion in the boards of companies while Companies Act of 2006 which took effect in October of 2009 and was preceded by similar corporate governance initiative such as the Cadbury Report of 1992 which first raised the idea of instituting corporate governance in board rooms defining it as “the system by which companies are directed and controlled”.
4 pages (1000 words) Essay
The Transparency in Corporate Governance
A comparison of the United States and the United Kingdom is also taken up in this study. The wave of corporate scandals which have erupted
40 pages (10000 words) Essay
The need for for formal government regulation to ensure societal checks and balances on perhaps wayward corporations
Corporate scandals such as notorious Enron, Tyco, WorldCom, Polly Peck, HIH Insurance, and OneTel, which mushroomed one after the other, raised an alarm for urgent changes in
1 pages (250 words) Essay
Explain the duties and responsibilities of the Non-executive Directors (NEDs) in the Corporate Governance process: a) within the context of the Board Committees, and b) more generally
Such various initiatives were undertaken to review UK’s accounting regulatory practices to improve the regulatory practice in the accounting industry. This eventually led to the strengthening of the role
4 pages (1000 words) Essay
Are non-executive directors capable of fulfilling the role given to them in the UK Corporate Governance Code
directors should be able to bring an independent judgment on issues that touch on strategy, performance, resource utilization, appointment of persons to key positions and standards of conduct in their respective companies. Due to lack of a legal distinction in the UK unitary
5 pages (1250 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation