Board of Directors Introduction

Summary; the Board of Directors

Board of director work as a bridge between management and shareholders, appointed by shareholders. Through this forum those who do not have opportunity to protect their right (minority shareholders, lenders, and society) can influence those who run the company.
If the board is effective and responsible, quality of governance will be good, overall performance of the company will be increased and all the stakeholders will be happier and if the board is ineffective and irresponsible board company’s overall performance will be reduced and interest of all its stake holders will suffer.
Board translate and communicate workable wishes of stakeholders into policies, to management and ensure there are actually followed. All the codes of corporate governance are directed at the board of the company for the protection of all stakeholder’s interests.
Board’s role as principal instruments requires that board should,
• Provide entrepreneurial leadership to the company, however board should be careful that risks taken are manageable and profits are earned without ignoring CSR’s and without sacrificing the interest of all stakeholders.
• Set strategic long term objectives and plans for their achievements
• Arrange resources needed to implement the strategic plans
• Review the performance of the management
• Set the company’s values and standards.( drafting company’s mission, vision and value statements and code of conduct for managers). Types of Ineffective Boards
By and large executive directors of a company end up electing the entire board of directors. This is being the situation, it is hardly surprising that executive directors do not opt for effective or powerful boards. Their intention is to have an amiable board that doesn’t bother them unduly and allow them to serving their own interest.
Rubber Stamp Board or Yes Men Board; approves whatever proposal or resolution is put forward.
Good Old Boys Board or Country Club Board;