1.2 Board structure and members
1.2.1 Composition and structure of board
<1>Composition
a. Chairman: Heading the board of directors and running the board.
b. Executive directors: Directors who responsible for the administration of a business.
c. Non-executive directors: Directors who do not hold any executive or management position in the company on addition to their role as a member of the board
<2>Attributes and skills of broad
a. Communication skills, listening, questioning, negotiating, etc
b. Decision-making and leadership (especially the chairman and the CEO)
c. Relevant expertise in industry, company, functional area and governance
d. General business knowledge
<3>Balance of board
a. Size, greater size can come greater opportunities for representation of varied views but difficult in operation and coherence of decision-making
b. Mix/diversity of expertise, male/female, experience, ethnic minorities
c. A balance of executive directors and independent NEDs so that no one can dominate the board’s decision making
<4>Unitary boards and Two – tier boards
|
Unitary boards |
Two – tier boards |
|
Signal board including EDs & NEDs |
Supervisory board & management board |
|
Advantages |
Disadvantages |
|
a. All directors have equal legal responsibility, that lead to more involved approach by NEDs and act in independent and supervisory capacity |
a. Confusion over authority and therefore a lack of accountability |
|
Disadvantages |
Advantages |
|
a. EDs and NEDs both manager and monitor, it may be too awkward and damage a task |
a. Clear and formal separation between the monitors and those being monitored |
1.2.2 Broad members – chairman and CEO
<1>Chairman
a. Definition:
(a) Heading the board of directors/running the board; provide effectiveness inside and outside the board
b. Responsibilities:
(a) Running board and setting its agenda; focus on strategic matters and key issues
(b) Ensuring directors received accurate and timely information to take sound decisions
(c) Ensuring effective communication with shareholders, especially major investors
(d) Ensuring sufficient time to discuss critical issues, avoid unrealistic deadline
(e) Taking the lead in providing new directors’ introduction program, board development and appraisal
(f) Encouraging active engagement by all the members of the board
(g) Reporting of and signing in accounts
<2>CEO
a. Definition
(a) Leading the management team at and below level; running the business
b. Responsibilities
(a) Business strategy and management: proposing and developing the group’s strategy and overall commercial objectives, implementing the decisions of the board and its committees, developing the main policy statement, reviewing organization structure and operational performance
(b) Investment and financing analysis
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