Question

A board of directors (BOD) is a crucial part of attaining good corporate governance. Explain the main responsibilities of a BOD. Illustrate two typical governance structures of the BOD and further elaborate on the role and extent of employee participation in relation to the two structures. You may include visual aids in your answers.

Answer 1

BOD plays a vital role in attaining good corporate governance by collectively directing the affairs of the organization.Following are the main responsibility of the BOD :-

i) To oversee the management and monitor the senior management performance.

ii) Approval and review of company's budget and plans.

iii) Monitor and compare the performance of company in accordance with its budget.

Formation of various committees for better management of the company and performance evaluation through different structure of the company.Formation of supervisory board and different committed such as audit committee,strategic committe , nomination and remuneration committee.

Through formation of this structure board control,regulate and evaluate the performance of the organization and in this process employees of the organization plays important role through their participation.Participation of employees is equally important with directors because they play important role in execution of all board meetings plan.