Role of BOD and Internal Control Flashcards
1
Q
What are the primary functions of a BOD?
A
- Direct company’s affairs collectively
- Ensure prosperity by setting vision, mission, values
- Strategizing
- Delegating to management
- Being accountable to shareholders and responsible to stakeholders
2
Q
What is the role of NEDs on the board?
A
NEDs:
- Oversee executive management
- Provide independent judgement
- Help in strategic guidance without being involved in day-today operations
3
Q
What is the difference between one-tier and two-tier board structures?
A
One-tier boards combine exec and non-exec directors in a single board responsible for all corporate decisions, whereas two-tier boards separate the supervisory function from the management board, enhancing oversight.
4
Q
Why is independence in the board curcial?
A
- Prevent conflicts of interest
- Ensure objective decision making
- Maintain trust with stakeholders
5
Q
What are some examples of board failures?
A
- Inadequate oversight of management
- Failure to mitigate risks leading to losses or scandal
6
Q
What are some consequences of board failures?
A
- Financial losses
- Damage to reputation
- Loss of shareholder trust
7
Q
What key areas might board failures lead to reforms in?
A
- Transparency
- Accountability
- Stakeholder trust
8
Q
A
