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Business Ethics and corporate governance

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CHAPTER 7 BOARD OF DIRECTORS – A POWERFUL INSTRUMENT IN GOVERNANCE OBJECTIVES Inevitably and unquestionably, the board of directors of a corporation is the most important instrument that would make it or break it. If a corporation is considered a role model or a beacon, it is in no small measure due to its CEO and a proactive board, while many corporate failures and scams invariably point out to an inactive or ‘obedient’ board. This chapter goes in depth into all these issues, as well as positive and negative elements connected to the board of directors. Chapter Outline         Introduction The Role of the Board in Ensuring Corporate Governance Governance Issues Relating to the Board The ole of Directors Independent Directors Directors’ Remuneration Family-owned Businesses and Corporate Governance Some Pioneering Indian Boards Introduction The separation of ownership from active direction and management is an essential feature of the company form of organisation. To manage the affairs of the company, shareholders elect their representatives called the “Directors” of the company. A number of such directors constitutes the “Board of Directors”. The board generally has only part-time directors. Corporate Management Structure The board may be expected to lay down policies, procedures and programmes, but may not be able to secure their implementation under their guidance and continuous supervision, or communicate their decision to t ...
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