Q1): Define the term Corporate in detail also discuss the component of Corporate Body?

Corporate governance is most often viewed as both the structure and the relationships which determine corporate direction and performance. The board of directors is typically central to corporate governance. Its relationship to the other primary participants, typically shareholders and management, is critical. Additional participants include employees, customers, suppliers, and creditors. The corporate governance framework also depends on the legal, regulatory, institutional and ethical environment of the community. Whereas the 20th century might be viewed as the age of management, the early 21st century is predicted to be more focused on governance. Both terms address control of corporations but governance has always required an examination of underlying purpose and legitimacy. - James McRitchie, 8/1999 Accountability to providers of capital. Bruce Weber, dean of the Lerner College of Business at the University of Delaware, at the inaugural meeting in November of the newly reconstituted advisory board for the John L. Weinberg Center for Corporate Governance. Corporate governance is gathering together a group of smart, accomplished people around a board table to make good decisions on behalf of the company and its stakeholders. As We Start Anew, Jim Kristie, editor and associate publisher of Directors & Boards. Generally, corporate governance refers to the host of legal and non-legal principles and practices affecting control of publicly held business corporations. Most broadly, corporate governance affects not only who controls publicly traded corporations and for what purpose but also the allocation of risks and returns from the firms activities among the various participants in the firm, including stockholders and managers as well as creditors, employees, customers, and even communities. However, American corporate governance doctrine primarily describes the control rights and related responsibilities of three principal groups: 1. the firms shareholders, who provide capital and must approve major firm transactions, 2. the firms board of directors, who are elected by shareholders to oversee the management of the corporation, and 3. the firms senior executives who are responsible for the day today operations of the corporation. As the Delaware Supreme Court has stated, the most fundamental principles of corporate governance are a function of the allocation of power within a corporation between its stockholders and its board of directors. (J. Robert Brown, Jr. and Lisa L. Casey, Corporate Governance: Cases and Materials, 2012) corporate governance system is the combination of mechanisms which ensure that the management (the agent) runs the firm for the benefit of one or several stakeholders (principals).

Such stakeholders may cover shareholders, creditors, suppliers, clients, employees and other parties with whom the firm conducts its business. Goergen and Renneboog, 2006 Corporate governance deals with the conflicts of interests between the providers of finance and the managers; the shareholders and the stakeholders; different types of shareholders (mainly the large shareholder and the minority shareholders); and the prevention or mitigation of these conflicts of interests. Marc Goergen, 2012. In broad terms, corporate governance refers to the way in which a corporations is directed, administered, and controlled. Corporate governance also concerns the relationships among the various internal and external stakeholders involved as well as the governance processes designed to help a corporation achieve its goals. Of prime importance are those mechanisms and controls that are designed to reduce or eliminate the principal-agent problem. (H. Kent Baker and Ronald Anderson, Corporate Governance: A Synthesis of Theory, Research, and Practice, 2010) Corporate governance is a field in economics that investigates how to secure/motivate efficient management of corporations by the use of incentive mechanisms, such as contracts, organizational designs and legislation. This is often limited to the question of improving financial performance, for example, how the corporate owners can secure/motivate that the corporate managers will deliver a competitive rate of return. (Mathiesen, 2002) The system by which companies are directed and controlled. (Sir Adrian Cadbury, The Committee on the Financial Aspects of Corporate Governance) Corporate Governance is concerned with holding the balance between economic and social goals and between individual and communal goals. The corporate governance framework is there to encourage the efficient use of resources and equally to require accountability for the stewardship of those resources. The aim is to align as nearly as possible the interests of individuals, corporations and society (Sir Adrian Cadbury in Global Corporate Governance Forum, World Bank, 2000) The process by which corporations are made responsive to the rights and wishes of stakeholders. (Demb and Neubauer, The Corporate Board: Confronting the Paradoxes) Corporate governance is about how companies are directed and controlled. Good governance is an essential ingredient in corporate success and sustainable economic growth. Research in governance requires an interdisciplinary analysis, drawing above all on economics and law, and a close understanding of modern business practice of the kind which comes from detailed empirical studies in a range of national systems. Simon Deakin, Robert Monks Professor of Corporate Governance Corporate governance is what you do with something after you acquire it. Its really that simple. Most mammals do it. (Care for their property.) Unless they own stock. [She continues:] it is almost comical to suggest that corporate governance is a new or complex or scary idea. When people own property they care for it: corporate governance simply means caring for property in

the corporate setting. Sarah Teslik, former Executive Director of the Council of Institutional Investors Corporate governance describes all the influences affecting the institutional processes, including those for appointing the controllers and/or regulators, involved in organizing the production and sale of goods and services. Described in this way, corporate governance includes all types of firms whether or not they are incorporated under civil law. Shann Turnbull Corporate governance is about the whole set of legal, cultural, and institutional arrangements that determine what public corporations can do, who controls them, how that control is exercised, and how the risks and return from the activities they undertake are allocated. Margaret Blair, Ownership and Control: Rethinking Corporate Governance for the Twenty-First Century, 1995. Corporate governance is the relationship among various participants [chief executive officer, management, shareholders, employees] in determining the direction and performance of corporations Monks and Minow, Corporate Governance, from 1995 version. Corporate governance deals with the way suppliers of finance assure themselves of getting a return on their investment. Shleifer and Vishny, 1997. Corporate governance is about how suppliers of capital get managers to return profits, make sure managers do not misuse the capital by investing in bad projects, and how shareholders and creditors monitor managers. - American Management Association Corporate governance is the relationship between corporate managers, directors and the providers of equity, people and institutions who save and invest their capital to earn a return. It ensures that the board of directors is accountable for the pursuit of corporate objectives and that the corporation itself conforms to the law and regulations. International Chamber of Commerce The relationship between the shareholders, directors and management of a company, as defined by the corporate charter, bylaws, formal policy and rule of law. The Corporate Library Corporate governance is the relationship among various participants in determining the direction and performance of corporations. The primary participants are: shareholders; company management (led by the chief executive officer); and the board of directors. CalPERS Corporate governance is the method by which a corporation is directed, administered or controlled. Corporate governance includes the laws and customs affecting that direction, as well as the goals for which the corporation is governed. The principal participants are the shareholders, management and the board of directors. Other participants include regulators, employees, suppliers, partners, customers, constituents (for elected bodies) and the general community. Wikipedia

The set of obligations and decision-making structures that shape the complex set of constraints that determine the profits generated by the firm and shape the exp post bargaining over those profits. Stijn Claessens Where the political scene is capital versus labor, the investor coalition defined corporate governance in terms of meeting the challenge of financial globalization, adherence to the OECD Principles, fulfilling international standards of governance in the global competition for capital. From a labor power position, blockholders and foreign portfolio investors were castigated as selfish oligarch in league with the heartless IMF and the faceless gnomes of Zurich. Those favoring the corporatist compromise made much of managers and workers being in the same boat together, of corporate governance choices that ensured that firms served the nation in a stable economy with owners dismissed as oligarchs or speculators. Countries shifting transparency coalitions and managerism alignment witnessed predictable invocations of corporate governance that protected the little guy, the individual investor, the widow and orphans, such as speeches by U.S. SEC commissioners. Meanwhile across the alignment divide, managers compete to hijack the notion of corporate governance for their own purposebuilding shareholder value. As Gourvevitch and Shinn, quoted in the above several paragraphs, note in their book Political Power and Corporate Control: The New Global Politics of Corporate Governance: Corporate governance the authority structure of a firm lies at the heart of the most important issues of society such as who has claim to the cash flow of the firm, who has a say in its strategy and its allocation of resources. The corporate governance framework shapes corporate efficiency, employment stability, retirement security, and the endowments of orphanages, hospitals, and universities. It creates the temptations for cheating and the rewards for honesty, inside the firm and more generally in the body politic. It influences social mobility, stability and fluidity It is no wonder then, that corporate governance provokes conflict. Anything so important will be fought over like other decisions about authority, corporate governance structures are fundamentally the result of political decisions. Shareholder value is partly about efficiency. But there are serious issues of distribution at stake job security, income inequality, social welfare. There may be many ways to organize an efficient firm. Corporate governance refers to how a corporation is governed. Who has the authority to make decisions for a corporation within what guidelines? This is the corporations governance. In the United States, the governance of corporations is largely determined by state laws of incorporation. State laws typically say that each corporation must be managed by or under the direction of its boards of directors. More specifically, corporate boards of directors are responsible for certain decisions on behalf of the corporation. At a minimum, as stated in most

state statutes of incorporation, director approval is usually required for amending corporation bylaws, issuing shares, or declaring dividends. Also, the board alone can recommend that shareholders vote to amend articles of incorporation, dissolve the corporation, or sell the corporation. No other person or entity except the board can take these actions. That is why discussions of corporate governance often focus on boards.( NACD) Corporate governance is not an abstract goal, but exists to serve corporate purposes by providing a structure within which stockholders, directors and management can pursue most effectively the objectives of the corporation. US Business Round Table White Paper on Corporate Governance September 1997 Corporate governance by definition rests with the conduct of the board of directors, who are chosen on behalf of the shareholders. Corporate Governance Forum of Japan 1997 Corporate governance is the system by which companies are directed and managed. It influences how the objectives of the company are set and achieved, how risk is monitored and assessed, and how performance is optimised. Good corporate governance structures encourage companies to create value (through enterpreneurism, innovation, development and exploration) and provide accountability and control systems commensurate with the risks involved. (ASX Principles of Good Corporate Governance and Best Practices Recommendations, 2003) Corporate governance is the process carried out by the board of directors, and its related committees, on behalf of and for the benefit of the companys stakeholders, to provide direction, authority, and oversights to management. (Paul J. Sobel, Auditors Risk Management Guide: Integrating Auditing and ERM (2007), from 2005 edition.

What Is a Corporate Body?

A corporate body also known as corporate entity is a Legal entity. Typical examples include; associations, firms, governments, government agencies or institution identified by particular names. It comprises of a collection of individuals who in the view of law have existence, rights, and duties distinct from their existence, rights, and duties as individuals.

A corporate is a group of people with a separate legal identity from the individuals it is composed of and a specific name. Examples of corporate bodies include companies, associations, institutions, business firms, government agencies, and religious bodies. Corporate bodies need to be registered; in the UK, this registration ought to be renewed by 15 March every year. The term legal corporate describes an entity such as a company or institution that is legally authorized to act as if it were one person. It comprises of a collection or succession of individuals who (in the view of law) have existence, rights and duties distinct from their existence, rights and duties as individuals. A body corporate is one that has perpetual succession and a legal personality distinct from that of its members. In the U.K. a body corporate includes companies limited by guarantee, companies with limited or unlimited liability, charter companies and bodies created by statute.

Q2) Describe the classification of OF STAKEHOLDERS in a corporate body?

Primary and Secondary Stakeholders Primary stakeholders have a major interest in the success of a project because they are directly affected by the outcome. Customers and end users are primary stakeholders as well as some project sponsors, project managers, and team members. Project sponsors are accountable for keeping the project on schedule. They should schedule regular meetings to review timelines, addressing complications that may arise, and assuring that the project manager remains on the task. Sponsors allocate and supply resources and finances to fund the project. The sponsor should have a clear understanding of what's expected in accordance with the scope, schedule, and resources needed for the project. Success of a project is largely dependent on the project sponsors leadership and support. The leadership provided by the sponsor helps identify cost overruns and provides alternatives in order to remain on budget. Secondary stakeholders also help to complete the project. Though their role isn't primary, they assist with administrative processes, financial, and legalities. Communication between primary and secondary types of stakeholders will ensure that everyone is working toward the same goal. Lack of communication can cause a breakdown within the project. Internal and External Stakeholders Project managers are internal stakeholders because they are directly involved in developing the project. They have authority to manage the project by handling responsibility of work performance, organizing and planning; effectively ensuring that all phases of the project are done accurately and efficiently. Vendors, suppliers, and outside organizations are external stakeholders because they supply needed elements for a project's success, they need to stay in communication at all times on goals, milestones and deliverables. Direct and Indirect Stakeholders Direct stakeholders are concerned with the day to day activities of a project. Team members are direct stakeholders as their workloads are scheduled around the project each workday. Indirect stakeholders are not impacted by the project. Those not affected are your customers and end users, because their concern is with the finished project. This would be the quality of merchandise, price, packaging, and availability.

The management of stakeholder responsibility is very important to the success of a project. It's important to define the various types of stakeholders, their needs or interests, and communicate them effectively.

Q3) Discuss in detail the Responsibilities of the board of corporate body?

1. Trusteeship

The most important responsibility of the board is trusteeship. The directors are responsible for the organization's programs, image and assets. They have a duty to manage the organization honestly, in good faith, and in the best interest of the organization while using the care and diligence of a reasonably prudent person.
2. Financial Management

The directors are responsible for spending money on programs that represent the organization's priorities of need. They are trustees responsible for funds which the organization raises, accepts and disperses. Simply put, the board member is obligated to exercise judgment that a reasonably prudent individual would exercise in regard to his or her own funds. Adequate financial controls which protect the assets and limit the liabilities (e.g., procedures for authorizing expenditures and borrowing, budget controls, etc.) are required.
3. Program Planning Implementation and Evaluation

The directors must ensure that the board sets goals, defines obligations, and develops plans to reach these goals. The goals should reflect the needs of the organization and its community and be translated into the budget or utilization of resources at the disposal of the organization. Activities carried out on behalf of the organization should be consistent with its established goals. Methods of evaluating the effectiveness of programs on the basis of effectiveness per unit of input are necessary for accountability purposes.
4. Communication

No organization can exist with the board acting alone. Communication within the organization, both written and verbal, enables the membership to understand and support the board actions. However, it is a two-way street since the board must "keep in touch" with members, especially when establishing goals and planning programs. Interaction with individuals and groups outside the organization's membership, including potential members, community leaders, other organizations, and various business and

government bodies, is very important. The spirit of this interaction can be largely affected by the image projected. The organization's image is developed through communicating the organization's actions, concerns and vision effectively, not just to the membership, but also to the community.

Q4) What do you mean by the corporate governance and discuss its terms & concepts briefly?
The system of rules, practices and processes by which a company is directed and controlled. Corporate governance essentially involves balancing the interests of the many stakeholders in a company - these include its shareholders, management, customers, suppliers, financiers, government and the community. Since corporate governance also provides the framework for attaining a company's objectives, it encompasses practically every sphere of management, from action plans and internal controls to performance measurement and corporate disclosure.

Q5) Discuss the Key Issues of corporate Governance?

Corporate governance is the system by which companies are directed and controlled. Accordingly, it involves ensuring that: there is a proper division of responsibilities between individual directors that no one person has unfettered powers of decisions that decision making is undertaken by those with the requisite skills and expertise that risks are identified and addressed that the potential outcomes of decisions are well considered and understood, and that there are appropriate internal controls/checks and balances in place. The better the corporate governance, the better the direction and control, and in this sense good governance should reduce risk and facilitate its management. Boards and new initiatives In order to implement new structures or initiatives, boards have to have the right skills and attributes. Accordingly, it may be that certain training or board changes are required in order to best deliver and manage new programmes. Identifying areas in which boards need strengthening is a key purpose of regular board evaluation, which in the case of FTSE 350 companies should be externally facilitated every three years. Companies should also call upon their legal and other advisers to help them assess and implement new structures or initiatives. Adopting the right structure to suit your organisation This is critical, there is no one-size fits all. It is for this very reason that the UK has a comply or explain approach to the Codes requirements, rather than a prescriptive framework. The quality of corporate governance ultimately depends on behaviour not process, and so companies must put in place a corporate governance regime which fits their business and market place and is aligned with their values. Diversity and the boardroom The concept of boardroom diversity has received much attention over the past two years, particularly gender diversity which was addressed by Lord Davies in the Davies Report, February 2011 (see our PLC Update November 2011). One of Lord Davies recommendations was that all FTSE 100 boards should aim for a minimum 25% female representation by 2015. Given the relatively low number of female CEOs, this issue is often reported in the popular press. The principle of boardroom diversity has been strengthened recently in the Code so that

listed companies are required to report annually on their boardroom diversity policy, any measurable objectives it has set and the progress it has made in achieving such objectives. However, the FRC has, following consultation, reached the view that the Code should not be amended to specify a minimum target because no matter how it is qualified any suggested figure will inevitably be viewed as a quota. The FRC has also resisted calls that the setting of measurable diversity objectives more generally should be mandatory, preferring to leave the question of setting measurable objectives to companies themselves. Getting the correct board composition and succession policy in place is an on-going and progressive issue which needs to be well planned and managed alongside an effective evaluation process. Disputes, shareholders and companies This is something my colleagues in our Dispute Resolution Department deal with on a regular basis. Every case is different and there is no one size fits all solution. Companies and shareholders can help avoid disputes by making constructive dialogue and regular meetings a key focus of their governance regimes. If governance behaviour is to change, it has to be a two-way street, with institutional investors playing their part and the Stewardship Code (aimed at institutional investors) is seen as a first step in reforming their attitudes to governance. Reported to be the first of its type anywhere in the world, the Stewardship Code formalises the rules of engagement between institutional investors and companies. Executive compensation and reporting Companies need to speak to their shareholders and take professional advice on the latest trends and developments. The Listing Rules, the Code and Association of British Insurers (ABI) guidance all provide that companies should obtain shareholder approval for all long-term incentive schemes. The Companies Act 2006 requires quoted companies (those listed on the Main Market but not those listed on AIM) to present a remuneration report for shareholder approval at the annual general meeting. Historically this has been an advisory vote only but under proposals outlined by UK Government in 2012, this is set to change. The proposal involves the introduction of a new binding vote on a companys remuneration policy to empower shareholders and encourage improved dialogue. To facilitate this, revised reporting regulations will be enacted to provide for two distinct parts in the directors remuneration report, namely: a policy report setting out all elements of a companys remuneration policy and key factors that were taken into account in setting that policy; and a report on how the policy was implemented, setting out actual payments to directors and details on the link between company performance and pay for the financial year covered by the accounts. The policy part of the report will be subject to a binding vote which will be required at a minimum every three years. Companies will continue to report annually on how the policy has been implemented in the previous year and there will still be an annual advisory vote on the actual payments made to directors. Performance-based managerial compensation and corporate performance The key risk is that such compensation encourages short-termism. Accordingly, there is now great emphasis placed on the need for such compensation to be aligned to the longterm interests of the company and for it to be subject to claw back in certain circumstances. Boards need to stay abreast of the latest developments and seek professional advice on appropriate structures and mechanism. Schedule A to the Code contains guidance on the design of performance related remuneration for executive directors. A well crafted stretch performance related compensation package, which is designed to incentivise and reward long term success, including non-financial performance metrics where appropriate, can positively affect corporate performance. Tackling fraud and money laundering The UK Bribery Act 2010 came into force on 1 July 2011. The Act has extraterritorial effect and carries criminal sanctions, and has thus given rise to far-reaching implications for UK headquartered businesses and multinationals operating in the UK, especially those operating in what are considered to be higher-risk sectors, such as mining and oil and gas, and higher-risk locations, such as developing and emerging economies.

Companies need to carry out detailed risk assessments and ensure that appropriate policies and procedures are put in place to manage bribery and corruption risk. Potential changes for the 2013 proxy season The NAPF has recently published (on 4 December 2012) a revised version of its corporate governance policy and voting guidelines. The guidelines introduce a small number of changes to the 2010 version including a greater emphasis on a clear policy for improved board diversity, an enhanced audit committee report which should include a statement on the companys auditor re-tendering policy, simplification of remuneration policies (including a focus on directors holding shares for the longer term) and a recommendation that directors service contracts should be available online. The future changing dynamics of corporate governance Whilst there are no fundamental changes to the Comply or explain approach, there will continue to be an emphasis on companies improving the quality of their explanations for deviations; indeed, the ABI has just published six criteria which are designed to assist companies when preparing their corporate governance statements. There will also be a continued focus on boardroom diversity issues, including at the European level, following the Commissions recent proposal for a European directive on improving gender balance among non executive directors of companies listed on stock exchanges. In the UK, significant reforms are being introduced to narrative reporting and executive remuneration which companies will quickly need to get to grips with.

Q6) Discuss theImportance of ethics in Corporate Governance? Or what is the corporate ethics in formulation of CSR policy?
Corporate governance is a term used to describe the structure of organizations regarding the establishment of a formal pattern that guides the running of the organization by those in charge. The role of business ethics in corporate governance refers to the manner in which ethics is applied during the process of running or administering the organization. To this end, business ethics in corporate governance can be applied in the way the management of the organization, which may be a business concern or a government, deals with both internal and external issues. An example of the role of business ethics in corporate governance is the way in which the management of a company deals with the issue of the selection of employees. The ethical manner of selecting employees should be based on criteria that include the possession of the necessary human capital, rather than on superficial attributes, such as nationality or physical attractiveness. Business ethics in corporate governance can also be seen in the manner of remuneration that the company uses to compensate the employees for their services to the organization. The question would be whether the company applies the same schedule or rate of remuneration for deserving employees. For example, some companies might adopt different schedules for offering bonuses and other types of remuneration to certain categories of employees, while ignoring other equally deserving employees.
Business ethics in corporate governance can also be seen in the manner in which the management of a company relates with individuals and external businesses, such as distributors, consumers and business partners. It may also be applied to the manner in which a company relates with host communities and the society at large. One of the ethical considerations that the management of an organization must necessarily address is the issue of responsible corporate behavior, including topics like giving back to the community and ensuring that they do not pollute the environment unnecessarily. Where a company is directly or indirectly responsible for the pollution of the environment either through its own actions

or the actions of any entity affiliated to it the practice of business ethics in corporate governance will ensure that the company will make the right decisions in terms of addressing the problem. For example, an oil tanker that spills crude oil into the sea will present an environmental hazard that a company will be both ethically and legally bound to respond to by cleaning up the spill.

Q7) Discribe the Procedure to Elect the Director & power of Director?
A member of a company's board of directors who assumes the shared responsibility of the board to determine and implement company policies. Directors act as trustees for the company and are not beholden to the shareholders, although they may be held accountable and personally liable by the shareholders for actions taken. 1) The directors of a company shall subject to section 174, fix the number of elected directors of the company not later than thirty-five days before the convening of the general meeting at which directors are to be elected, and the number so fixed shall not be changed except with the prior approval of a general meeting of the company. 2) The notice of the meeting at which directors are proposed to be elected shall among other matters, expressly state (a) the number of elected directors fixed (b) the names of the retiring directors. 3) Any person who seeks to contest an election to the office of director shall, whether he is a retiring director or otherwise, file with the company, not later than fourteen days before the date of the meeting at which elections are to be held, a notice of his intention to offer himself for election as a director: Provided that any such person may, at any time before the holding of election, withdraw such notice 4) All notices received by the company in pursuance of sub section (3) shall be transmitted to the members not later than seven days before the date of the meeting, in the manner provided for sending of a notice of general meeting in the normal manner or in the case of a listed company by publication at least in one issue each of a daily newspaper in English language and a daily newspaper in Urdu language having circulation in the Province in which the stock exchange on which its securities are listed is situate. 5) The directors of a company having a share capital shall, unless the number of persons who offer themselves to be elected is not more than the number of directors fixed under sub-section (1), be elected by the members of the company in general meeting in the following manner, namely:under sub section (1); and

a) A member shall have such number of votes as is equal to the product of the number of voting shares or securities held by him and the number of directors to be elected; b) A member may give all his votes to a single candidate or divide them between more than one of the candidates in such manner as he may choose; and c) The candidate who gets the highest number of votes shall be declared elected as director and then the candidate who gets the next highest number of votes shall be so declared and so on until the total number of directors to be elected has been so elected. 6) The directors of a company not having share capital shall be elected by members of the company in general meeting in the manner as provided in articles of association of the company. POWER OF THE DIRECTORS 1) The business of a company shall be managed by the directors, who may pay all expenses incurred in promoting and registering the company, and may exercise all such powers of the company as are not by this Ordinance, or by the articles, or by a special resolution, required to be exercised by the company in general meeting. 2) The directors of a company shall exercise the following powers on behalf of the company, and shall do so by means of a resolution passed at their meeting, namely: a) to make calls on shareholders in respect of moneys unpaid on their shares; b) to issue shares; c) to issue debentures; d) to borrow moneys otherwise than on debentures; e) to invest the funds of the company; f) to make loans;

g) to authorize a director or the firm of which he is a partner or any partner of such firm or a private company of which he is a member or director to enter into any contract with the company for making sale, purchase or supply of goods or rendering services with the company; h) to approve annual or half yearly or other periodical accounts as are required to be circulated to the members; i) j) to approve bonus to employees; to incur capital expenditure on any single item or dispose of a fixed asset in accordance with the limits as prescribed by the Commission from time to time;

Q8) Discuss brifly the Types of Director in a Corporate Body?

There are two types of director, executive and non-executive. There is no legal distinction made between executive and non-executive directors - the difference is that non-executive directors do not get involved in the day-to-day running of the business. Executive directors perform operational and strategic business functions such as:

managing people looking after assets hiring and firing entering into contracts

Non-executive directors use their experience and expertise to provide independent advice and objectivity, and they usually have a role in monitoring executive management. A non-executive director might be appointed to carry out a specialist role on a part-time basis or for their expertise in specific activities, such as strategy and contract negotiation. They usually work part time, attending board meetings and spending time on specific projects. Non-executive directors bring an objective view of the business, can improve the board's effectiveness at relatively low cost and provide valuable business connections.
The employment status of directors

A director is an officer of the company. Many directors work under a contract for services and are therefore paid a fee. In these circumstances, they would be regarded as self-employed. However, it's possible for them to work for you under a contract of service, making them an employee. If so, you must pay them a salary and make deductions through the PAYE (Pay As You Earn) system. However, National Insurance arrangements are different for directors compared to other types of employee. Note that directors who are employees will also benefit from certain employment-protection rights not available to non-employees, eg the right to claim unfair dismissal.

Q9) Discuss briffly the Power of Shareholders in corporate body? & how shareholders can use their powers?
Introduction

You are a "shareholder" if your name is entered on a company's share register (see How to maintain a company share register) as being the holder at that time of one or more shares in the company, or if you are entitled to be on the register and are waiting to be included on it. Your rights as a shareholder are set out in the COMPANIES ACT 1993 and in the company's constitution. (For information on the importance of the constitution and how a company is formed, see How to form a company.)
What rights and powers can I exercise as a shareholder?

While the day-to-day management of the company is the responsibility of the company's board of directors, the shareholders may exert a significant indirect influence by exercising the rights and powers available to them. These include:

passing resolutions at shareholder meetings (see below) voting out directors electing to sell their shares exercising minority buy-out rights (this is where dissenting shareholders require the company to buy their shares: the right can give significant protection to disaffected shareholders wanting to sell and preserve their capital) requesting the company in writing to provide information held by the company (with a right to appeal to the court if the company refuses) requiring the company to provide the shareholder with a statement of the shares that he or she holds, and of the various rights, privileges, conditions and limitations that attach to those shares

Company decisions that require shareholder participation

Certain decisions about the running of the company cannot be made without shareholders participating. These include:

various decisions requiring the unanimous assent of shareholders (see below) alterations to the constitution alterations to shareholders' rights decisions involving major transactions decisions involving remuneration and other benefits

Shareholders may review the management of the company

Irrespective of what is in the company constitution, the chairperson of a shareholders' meeting must allow a reasonable opportunity for the shareholders at the meeting to question, discuss, or comment on the management of the company. In addition, shareholders are entitled to pass a resolution relating to the management of the company. However, the resolution will not be binding on the board of directors, unless the company constitution (if there is one) provides otherwise.
Shareholder meetings: ordinary resolutions and special resolutions

The powers reserved for shareholders may only be exercised at a meeting of shareholders or by a resolution passed instead of a meeting. Shareholder powers may generally be exercised by ordinary resolution, which means a resolution passed by a simple majority. However, in certain cases shareholder powers must be exercised by "special resolution", that is, a resolution requiring a 75 percent majority. This applies where the shareholders wish to exercise their powers to:

adopt, alter or revoke the company's constitution approve a major transaction approve an amalgamation put the company into liquidation

Shareholder actions requiring unanimous assent

In addition, there are certain types of actions that shareholders may take if all entitled shareholders agree unanimously. These actions include:

authorising dividends approving a discount scheme the acquisition by the company of its own shares the redemption of shares giving financial assistance to some other person or company to buy the company's own shares

How do I enforce my rights in the courts?

There are a number of ways in which shareholders can take court action against the company to enforce their rights, including:

applying for an order restraining the company from taking action that would contravene the company's constitution or the COMPANIES ACT 1993 applying for an order directing the company to take any action that its constitution or the Act requires it to take suing the company or a director for a breach of a duty owed to the shareholder

if the company has acted unfairly or oppressively towards the shareholder, applying for an order that the company must take certain action, such as buying the shareholder's shares or paying compensation applying for an order for the company's records to be inspected

What are my liabilities as a shareholder?

As a shareholder you are not liable for the company's obligations merely by reason of being a shareholder, unless the company's constitution provides that shareholder liability is unlimited. If the constitution does not provide this, then your liability as a shareholder is limited to:

any amount unpaid on a share held by you any liability expressly provided for the constitution any liability for breach of directors' duties if the shareholders are deemed to be directors (this applies if the company gives the shareholders powers that would normally be exercised by the directors) any liability to repay distributions made to the shareholder when the company did not satisfy the solvency test under the COMPANIES ACT 1993, to the extent that the distribution is recoverable under the Act obligations to meet calls made by the company in relation to the liability attaching to shares

Former shareholders may be liable to the company for amounts outstanding in respect of any shares or for any liability provided for in either the Act or the constitution.
Cautionary notes

Company law is detailed and can be complex. Also, frequently large amounts of money are at stake. At the earliest possible stage you should obtain legal advice as to your rights, powers, duties and liabilities as a shareholder so that your interests can be protected. In a number of situations the COMPANIES ACT 1993 sets out strict time limits for shareholders wanting to exercise their rights. For example, if you wish to exercise minority buy-out rights you must give the company written notice within 10 working days after the particular resolution from which you dissented.

Q10) Discuss in detail the ROLES AND RESPONSIBILITIES CHIEF EXECUTIVE OFFICER in Corporate body?

The Chief Executive Officer (CEO) is responsible for leading the development and execution of the Companys long term strategy with a view to creating shareholder value. The CEOs leadership role also entails being ultimately responsible for all day-to-day management decisions and for implementing the Companys long and short term plans. The CEO acts as a direct liaison between the Board and management of the Company and communicates to the Board on behalf of management. The CEO also communicates on behalf of the Company to shareholders, employees, Government authorities, other stakeholders and the public.

More specifically, the duties and responsibilities of the CEO include the following: 1. To lead, in conjunction with the Board, the development of the Companys strategy; 2. To lead and oversee the implementation of the Companys long and short term plans in accordance with its strategy; 3. To ensure the Company is appropriately organized and staffed and to have the authority to hire and terminate staff as necessary to enable it to achieve the approved strategy; 4. To ensure that expenditures of the Company are within the authorized annual budget of the Company; 5. To assess the principal risks of the Company and to ensure that these risks are being monitored and managed; 6. To ensure effective internal controls and management information systems are in place; 7. To ensure that the Company has appropriate systems to enable it to conduct its activities both lawfully and ethically; 8. To ensure that the Company maintains high standards of corporate citizenship and social responsibility wherever it does business; 9. To act as a liaison between management and the Board; 10. To communicate effectively with shareholders, employees, Government authorities, other stakeholders and the public; 2 11. To keep abreast of all material undertakings and activities of the Company and all material external factors affecting the Company and to ensure that processes and systems are in place to ensure that the CEO and management of the Company are adequately informed; 12. To ensure that the Directors are properly informed and that sufficient information is provided to the Board to enable the Directors to form appropriate judgments; 13. To ensure the integrity of all public disclosure by the Company; 14. In concert with the Chairman, to develop Board agendas; 15. To request that special meetings of the Board be called when appropriate; 16. In concert with the Chairman, to determine the date, time and location of the annual meeting of shareholders and to develop the agenda for the meeting; 17. To sit on committees of the Board where appropriate as determined by the Board; and 18. To abide by specific internally established control systems and authorities, to lead by personal example and encourage all employees to conduct their activities in accordance with all applicable laws and the Companys standards and policies, including its environmental, safety and health policies.

Q11) Discuss the Role and Responsibilities of NonExecutive Chairman of the Board? How can a chairman exercise his power?

Provides leadership to the Board Provides support and advice to the CEO Maintains the authority to call meetings of the Board of Directors and meetings of the independent Directors o Promotes effective communication on developments occurring between Board meetings Presides over: o Meetings of the Board of Directors o Executive sessions of the independent Directors without management present o Annual and special meetings with shareholders Briefs the CEO on issues and concerns arising in the executive sessions of the Board Organizes the work of the Board o Establishes the annual schedule of the Board o Establishes the agendas for all Board meetings in collaboration with the CEO o Consults with all Directors concerning Board agendas and information provided to the Board Helps enable access to information to help the Board to monitor the Companys performance and the performance of management o Facilitates communication between and among the independent directors and management o Oversees the distribution of information to Directors Coordinates periodic Board input and review of managements strategic plan for the Company Works with the Chairman of the Corporate Governance and Nominating Committee (Governance Committee) with respect to the recruitment, selection and orientation of new Board members and committee composition Oversees the Organization and Compensation Committees development of appropriate objectives for the CEO and monitors performance against those objectives Coordinates and chairs the annual Board performance review of the CEO and communicates results to the CEO Leads the Boards review of the succession plan for the CEO and other key senior executives Coordinates the Boards self-assessment and evaluation processes Attends all Committee meetings ex officio and serves as a member of Governance Committee and such other Committees as assigned by the Board

Q12) Discuss in detail the types of Nonexecutive director in a corporate body?

A non-executive director (abbreviated to non-exec, NED or NXD) or outside director is a member of the board of directors of a company who does not form part of the executive management team. They are not employees of the company or affiliated with it in any other way and are differentiated from inside directors, who are members of the board who also serve or previously served as executive managers of the company (most often as corporate officers). Non-executive directors are sometimes considered the same as an independent director,[1][2] while other sources distinguish them from independent directors saying non-executive directors are allowed to hold shares in the company while independent directors are not.[citation needed] Non-executive directors have responsibilities in the following areas, according to the Higgs Report published by the British government in 2003:[3][4]

Strategy: Non-executive directors should constructively challenge and contribute to the development of strategy. Performance: Non-executive directors should scrutinise the performance of management in meeting agreed goals and objectives and monitoring and where necessary removing senior management, and in succession planning. Risk: Non-executive directors should satisfy themselves that financial information is accurate and that financial controls and systems of risk management are robust and defensible. People: Non-executive directors are responsible for determining appropriate levels of remuneration of executive directors and have a prime role in appointing and where necessary removing senior management, and in succession planning.

NEDs should also provide independent views on:

Resources Appointments Standards of conduct

Non-executive directors are the custodians of the governance process. They are not involved in the day-to-day running of business but monitor the executive activity and contribute to the development of strategy. In 2011 the Financial Times launched the first formal qualification specifically for Non-Execs. The Non-Executive Directors Certificate is a level 7 masters postgraduate qualification accredited by Edexcel.

Q13) Discuss The role of the nonexecutive director in a corporate body?

The key responsibilities of NxDs

Chairmen and chief executives should use their nonexecutive directors to provide general counsel and a different perspective on matters of concern. They should also seek their guidance on particular issues before they are raised at board meetings. Indeed, some of the main specialist roles of a non-executive director will be carried out in a board sub-committee, especially in listed companies. The key responsibilities of nonexecutive directors can be said to include the following: Strategic direction As an outsider, the non-executive director may have a clearer or wider view of external factors affecting the company and its business environment than the executive directors. The normal role of the nonexecutive director in strategy formation is therefore to provide a creative and informed contribution and to act as a constructive critic in looking at the objectives and plans devised by the chief executive and his or her executive team; Monitoring performance Non-executive directors should take responsibility for monitoring the performance of executive management, especially with regard to the progress made towards achieving the determined company strategy and objectives. They are also responsible for determining appropriate levels of remuneration of executive directors, and have a prime role in appointing, and where necessary removing, executive directors and in succession planning; Communication The company's and board's effectiveness can benefit from outside contacts and opinions. An important function for non-executive directors, therefore, can be to help connect the business and board with networks of potentially useful people and organisations. In some cases, the non-executive director will be called upon to represent the company externally; Risk Non-executive directors should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible.

Audit
It is the duty of the whole board to ensure that the company accounts properly to its shareholders by presenting a true and fair reflection of its actions and financial performance and that the necessary internal control systems are put into place and monitored regularly and rigorously. A non-executive director has an important part to play in fulfilling this responsibility whether or not a formal audit committee (composed of non-executive directors) of the board has been constituted.