CORPORATE GOVERNACE REVISOIN.docx

CORPORATE GOVERNACE REVISOIN Keyed to corporate governance charter with examples and explanations, Lawyer Maimuna Al Sulimani Table of Contents {#table-of-contents.TOCHeading} ================= [CH3: Role of the Board 2](#ch3-role-of-the-board) [Governace Structure: 3](#governace-structure) Voc...

CORPORATE GOVERNACE REVISOIN Keyed to corporate governance charter with examples and explanations, Lawyer Maimuna Al Sulimani Table of Contents {#table-of-contents.TOCHeading} ================= [CH3: Role of the Board 2](#ch3-role-of-the-board) [Governace Structure: 3](#governace-structure) Vocabulary: word, definition example Rule: principle, committee notes and case Case: Summary: notes, sentence wrap up section. **Role Of the Board** CH3: Role of the Board ====================== - **Board (unitary)- Management + Oversight colab/Accounta 1G=effective GoV** - **Bears ultimate responsibility: All directors are equals in law** - - **Duties:** - Directors bear an [individual responsibility] for the performance of their duties before the law, and [collective responsibility] for the behaviour of the board. - 'specific duties' - act in good faith (act in the best interests of the co.) - not to gain advantage - not to misuse information - act with care and diligence (a reasonable level of expertise & dedication) - not to trade while insolvent - **Dual role** - **9 roles of the board ([Principle 2)]{.smallcaps}** 1. The board is responsible for setting the **Strategy formulation** and **approval: ensuring alignment with overall goals***[.: ensure human and financial resources are available to achieve objectives;]* 2. CEO selection, monitoring, evaluation, mentoring, remuneration & removal 3. Monitoring of organizational performance- 4. Networking on behalf of the organization : enhance its reputation. 5. Communication with key stakeholder groups: to foster trust and transparency. **Compliance** 6. Overview of risk management & compliance policies, practices & performance 7. Ensuring an appropriate top-level policy framework exists- robust policies are in place to guide the company's operations and governance. 8. Exercising control of the organization in times of crisis to maintain stability **Lorsch & MacIver** "There are circumstances in which a board is required to take a ***much more active role*** in guiding the affairs of the organisation. This occurs ***in the event of crisis**."* **Role Of The Board** Governace Structure: -------------------- - **Three pivotal roles in the governance system**: Chairperson, CEO and Company Secretary [**The cahirperson of the board** [Principle 4]{.smallcaps}**:** ] - The chairperson is primarily responsible for effectively leading the board of directors and the company to ensure that the board performs its role, toward achieving its strategic visions and the purpose for which it is established. - The chairperson of the board of directors can act as member or chairperson in other sub committees of the board except the audit committee - **Lead director** - \'first among equals\': The lead director acts as a primary figure among the board members, promoting collaboration while ensuring that all directors\' voices are heard and valued. - Maintain Cohesion - Ensure that the resolutions passed by the board are implemented - **Facilitator** - **Boardroom Process**: Guide discussions, set agendas, and foster an environment for constructive debate. - **Information Flow**: Ensure directors receive accurate, clear, and timely information. - **Communication**: Maintain efficient communication with shareholders and foster constructive relations between the board and executive management. - **Mentor** - CEO, directors & managers: helping them develop their skills and navigate challenges effectively. - Guiding the ongoing development of board (collectively) & directors (individually) - Induction Program: Implement an induction program for new directors to familiarize them with the company's business and operations. - **Legal Representation** - The chairperson represents the company in legal matters before competent courts and third parties. **Role of the Board** **The Role of Company Secretary [(principle5)]{.smallcaps}** **Tasks of Secretary:** - Sending meeting invitations and determining agenda topics. - Assisting in meeting management and summarizing board resolutions. - Recording and maintaining meeting minutes. - Ensuring compliance with bylaws, regulations, and directives. - Safeguarding company documents and reports.Top of FormBottom of Form **[Legal compliance - merge of Company Secretary / Legal Counsel]{.smallcaps}** - Board papers agreed & circulated: end meeting invitations and determine agenda topics as instructed by the - Board minutes: chairpersonThe secretary must record the minutes of board meetings, showing all issues and details deliberated, and the resolutions adopted - Statutory requirements - Compliance matters - Interface between Chairman & CEO **[Contents of Board Papers]{.smallcaps}** Minutes of the previous meeting - Managing Director\'s report - Key performance indicators - Financial: elated to the company\'s financial health. - Non-financial: critical metrics such as customer satisfaction, employee engagement, etc. - Any Board submissions, requiring decisions  The board must hold at least four meetings per year.  The interval between any two meetings shall not exceed four consecutive months.  For regular meetings, the agenda must be sent to all directors at least seven working days prior to the meeting date. ### **The Role Of The CEO [(Principle 6 )]{.smallcaps}** Relationship between Board & CEO must be positive & that ensures free flow of information & common understanding of the company\'s vision, mission and goals Major roles & specific delegations e.g. Capital & operating expenditures, senior staff appointments etc. - Working towards the company's objectives as stated in the articles of association. - Timely informing the board of risks and challenges, including unaddressed risks. - Protecting shareholders\' rights and considering stakeholder interests. - Management is accountable to the board for their actions. - Management members must have contracts outlining their rights and obligations. - They should enhance executive skills to build board and shareholder confidence. - Management must disclose any financial transactions involving personal interests of executives or their relatives before finalizing them. - They should focus on long-term sustainability rather than just short-term profits. - The CEO of a public joint stock company cannot simultaneously serve as CEO of a subsidiary.