Th board of directors Flashcards
1
Q
Unitary board
A
- made up of executive and non executive directors.
- responsible for the overall performance of the enterprise and it conformance with strategies
2
Q
basic functions of the board (Tricker)
A
- accountability
- strategic formulation
- monitoring and supervision
- policy making
3
Q
Board membership
A
- chairman and CEO roles
- number of directors
- mix of non and executive
- diversity of experience
4
Q
Requirements of the UK CG code
A
- appropriate balance of skills, independence and knowledge of the company that allows them to perform their duties effectively
- 50/50 Exec/INED minimum
5
Q
benefits and drawbacks of a large board
A
+ cand collectively process more information
+ variety of skills, experience & thinking
- higher co-ordination costs
- free rider problem
6
Q
Role of the chairman
A
- leadership of the board team
- strategic leadership
- management of meetings
7
Q
INEDs- Cadbury report
A
‘non executive members of the board is of special importance in setting and maintaining standards of corporate governance’
8
Q
Indicators of independence
A
- former employees (5 yrs)
- business relationships
- additional remuneration from company
- close family ties
- significant shareholder
9
Q
INED purpose
A
- monitoring ( protect shareholders & monitor directors)
- strategic contribution (broader view & constructive criticism)
10
Q
Purpose of directors remuneration
A
- attract and retain the best people
- motivate and reward good performance
- transparent reporting to shareholders
11
Q
Examples of remuneration
A
- bonus
- shares/options
- benefits in kind
- pension
