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Global Strategic Management

Essay by 24  •  December 25, 2010  •  473 Words (2 Pages)  •  1,272 Views

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What does corporate governance mean?

Corporate Governance means the relationship between all stakeholders, board of directors and top management that determine the direction and performance of a corporation. (Wheelen, Pg 36)

What is the role of the Board of Directors in a corporation?

The role that the board of directors main responsibilities are representing the shareholders in a proxy fashion to ensure that the strategy of the corporation stands up to the test of adding value to shareholder wealth. This entails oversight of the chief officers and managers of the company and understanding how the business works. The role of shareholders is quite passive in this manner, and the power of the shareholder is mostly vested in the trust of the board. (Wheelen, Pg 36)

Primary responsibilities is to protect the goods of the shareholders and make sure the shareholders receive respectable returns on the investments. In some European countries their feelings are different and feel that their responsibilities are to protect the employees first then the shareholders. The job is to select, approve, and evaluate appropriate compensations that attracts or pay the dividends, stocks or repurchase programs that companies recommend or are strongly discourage those acquisitions and mergers. (beginners invest, 2007)

Based on research, give a real-world example of issues facing a board of director?

An Example of a real world issue:

All Board directors are elected by shareholders. Two types of representatives: One is chosen from the company the other is one from another company.

The first involved individuals chosen in the company which can be a CEO, CFO, Manager or others. (Investopedia, 2007)

In the board of directors one has many responsibilities that must be viewed and shared the most. This is a group of people who are charges either in a non-profit of for-profit corporation. They are also responsible to the shareholders, stakeholders and everyone who is interested by the corporation. Non-profit is a corporations that the board reports to the communities and stakeholders it provides for.

The major duties that a board of directors member does provide is continuity, selects and appoints a chief executive, organize policies and objectives, acquire operations, directs the process

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