Week 6 Flashcards
Board structure
Two- tier Board
France
Germany
Japan
Board structure
Unitary Board
UK
USA
Board structure
Supervisory Board
Non-Exec Directors
Board structure
Board of Directors
Non-Exec Director - Executive Director
Board structure
Management Board
Executive Directors
Board - Roles and Responsibilities
Audit Committee Risk Committee Nominations Committee Remunerations Committee Chairman Chief Executive Officer (CEO)
Board - Roles and Responsibilities
Audit Committee
The audit committee meets separately to the mainboard and consists entirely of non-executive directors (3 or more) of whom at least one must have appropriate and up-to-date financial experience.
Their role is to monitor the integrity of the financial statements, review internal controls and audit effectiveness, monitor the appointment of and removal of external auditors, ensuring independence, and provide forum that facilitates confidential whistleblowing.
The key to the their role is to ‘oversight’, ‘review’, and ‘assessment’.
Board - Roles and Responsibilities
Risk Committee
This committee consists of largely non-executive directors that assessed the company’s risk exposure and risk management strategy.
This committee do overlap with the audit committee’s role in terms of internal control risks, but it is recommended to keep them both separate.
Board - Roles and Responsibilities
Nominations Committee
This committee looks at the structure of the board and largely consist of non-executive directors.
The role is to ensure that any appointments made are not biased and are in line with the specifications of the roles concerned, which includes appropriate balance of executive and non-executives directors, having the right mix of skills, knowledge, experience and gender balance, succession planning and that the directors are spending sufficient time on their duties.
Board - Roles and Responsibilities
Remunerations Committee
This committee consists of only non-executive directors. The role is to reviews pay scales, the proportion of different types of pay, the period in which performance-related pay becomes payable, what proportion of a pay package consists of the performance-related component and to ensure that rewards are disclosed and transparent.
Board - Roles and Responsibilities
Chairman
Runs the board of the Company Appointed by the other Board member Role as Non-Executive Directors Reports to the Shareholders Chair all Board meetings, annual general meetings and shareholder meetings Key representative to the general public
Board - Roles and Responsibilities
Chief Executive Officer (CEO)
Runs the day-to-day operations of the company
Appointed by the Board
Role as Executive Director
Reports to the Chairman and board
Chair all key operational and management meetings
Key representative to employees, customers, suppliers
Stakeholders
A person or group who has an interest in or can be affected by an organization’s activities.
Stakeholders
Internal
Employees
Management
Trade unions
Stakeholders
External
Customers Suppliers Competitors Government Local Community
