Documenti di Didattica
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Shivani Vohra
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á ëefinition
d Organization may be defined as a collection of individuals working together in a
division of labor to achieve a common goal.
d It is a social arrangement which pursues collective goals, controls its own
performance, and has a boundary separating it from its environment.
A Hierarchical representation
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á ëefinition
d A Board of ëirectors is a body of elected or appointed members who jointly oversee the activities
of a company or organization. The body sometimes has a different name, such as board of
trustees, board of governors, board of managers, or executive board. It is often simply referred to
as ´The Board." The Board is the top administrative organ of the company. The ëirectors have
collective responsibility and they take decisions by means of majority principles. The ëirectors act
as agents, trustees and managing partners of the company.
á Role
d Trusteeship Function
d Formulation Of Policies And Programmes
d Appointment Of Executives And Other Personnel
d Approval Of Budgetary Estimates
d Evaluation Of Performance Of Executives
d ëelegation Of Powers And Authority
d Proposal And ëistribution Of ëividend
d Issuing Additional Securities
d Performing Statutory Functions
d Management ëevelopment Functions
d Motivation Of Employees
d ëeveloping Vitality In The Organization
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á ëuties of Board of ëirectors
d ëisclosure of relevant facts
d Holding qualification shares
d Attending board meetings
d Getting permission for loans from the central government
d ëisclosure of personal interest
d Holding of personal interest
d Forwarding statutory report
d Filing return of allotment
d ëelivering share certificate
d Paying dividends to shareholders
d Maintaining books and registers
d ëisclosing own shareholdings.
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á 2eed for Board of ëirectors
d Overseeing the way the company conducts its business to insure that it is
managed effectively.
d Selecting, compensating and evaluating the CEO
d the board can provide the kind of advice and insight that may circumvent
mistakes or validate the direction the CEO is taking the company in.
d The Board can support management in the development of organizational
planning, succession and resource management.
d their primary role is one of a supporter, a coach and even mentors.
d They must also assume the role of questioners and monitors of company
performance.
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á Structure of Board of ëirectors
d The Board is made up of individual men and women (the ´ëirectors") who
are elected by the shareholders for multiple-year terms.
d Many companies operate on a rotating system so that only a fraction of the
directors are up for election each year; this makes it much more difficult for
a complete board change to take place due to a hostile takeover.
d In most cases, directors either,
Have a vested interest in the company,
Work in the upper management of the company, or
Are independent from the company but are known for their business abilities.
d The number of directors can vary substantially between companies
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á Meaning
d Generally, having Minorities and Women represented on Corporate Boards.
Some shareholder proposals also urge diversity of experience and age.
á 2eed
d Avoiding Conflict
d ëeveloping a spirit of Cooperation
d 2o Communication gaps
d A vast pool of experienced ëirectors
d Highly qualified Top management
d 2o Conflicts of Interests and Agenda Pushing
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á Types
d Gender ëiversity
d Age ëiversity
d Profession / Skill Set ëiversity
d Experience ëiversity
d Religion ëiversity
d Socio-Cultural ëiversity
d Other types like: -
Language ëiversity
Common Interests
Aesthetics
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á Gender ëiversity
d Gender diversity is an important aspect of Board ëiversity. Gender diversity
refers to the presence of women on Corporate Boards of ëirectors.
d The gender composition of the board can affect the quality of this
monitoring role and thus the financial performance of the firm.
á ë
d
female directors are significantly less likely
to experience severe attendance problems.
d
Another way of trying to understand how
women change boards is to see how they are deployed.
d ë
ëespite not having a discernible impact
on CEO compensation, female directors appear to affect director
compensation.
á Whether female directors are different from their
male counterparts?
d Female directors have more ëirectorships and shorter tenure than male
ëirectors. They are also younger and less likely to be retired from their main
occupation than male ëirectors. These differences are all statistically
significant( see appendix below).
d Female ëirectors are slightly busier than male ëirectors providing evidence
consistent with the view that firms actively seek female ëirectors but
female ëirectors are in short supply.
d Another characteristic in which male and female ëirectors clearly differ is
their status as independent, the average proportion of independent
directors is 63 percent; female directors are classified as independent in
80 percent of the cases
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á Age ëiversity
d When addressing age as an element of diversity, there are many facets to
consider. While one may believe that older board members bring more
experience to the table and younger members bring more energy and a new
outlook.
Common Interests
Aesthetics
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á Implementing Board ëiversity
d Building a ëiverse Board - A diverse board is the most important aspect of
corporate diversity. It shows the organization·s commitment and sets an
example for the rest of the organization.
d Building a Sustainable ëiversity Infrastructure - Beyond board diversity, building
a sustainable diversity infrastructure is critical because it is the basis by which
diversity will spread throughout the rest of the organization. The primary
components include an executive, a business plan, and resources like a budget,
staff, and external consultants.
d Implementing a ëiversity ROI Initiative - The diversity ROI initiative builds on the
value of the diverse board and infrastructure to prove the full business impact of
diversity.
á Conclusion
d Board diversity is a bigger issue than you think, but if taken into consideration
seriously, it will definitely help in creating the future for the organization.
d A diverse board demonstrates that diversity is a value that the company holds
throughout its business.