...recommendations of the following reports: The Cadbury Report 1992 Recommended a ‘Code of Best Practice’ This was a voluntary code and its main proposals were related to: The composition of company boards The length of directors contracts Disclosure of remuneration packages Auditing matters Greenbury Report 1995 Reinforced the ‘Code of Best Practice’ recommended by Cadbury and made further recommendations regarding matters relating to directors’ remuneration. Hampel Report 1998 ‘Fine tuned’ the above reports. In particular, the points that: The roles of Chairman and Chief Executive should be separate Directors’ contracts should be for one year or less Remuneration committee should be made up of independent non-executive directors Non-executive directors may be paid in company shares although this not recommended A senior non-executive director should be nominated to deal with shareholders’ concerns Directors should be trained The Code proposes principles and code provisions under five headings: Directors Directors’ remuneration Relations with shareholders Accountability and audit Institutional shareholders Further guidance on accountability and audit is contained in the Turnbull Committee Report (1999) ‘Internal Control: Guidance for Directors of Listed Companies incorporated in the United Kingdom’ Corporate Governance – a brief history of the Cadbury Report The Cadbury Committee was set up in May 1991 largely as a result of highly public scandals such...
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...NON EXECUTIVE DIRECTORS A member of a company's board of directors who is not part of the executive team. A non-executive director (NED) typically does not engage in the day-to-day management of the organization, but is involved in policy making and planning exercises. In addition, non-executive directors' responsibilities include the monitoring of the executive directors, and to act in the interest of any stakeholders. Also called external director, independent director and outside director. ROLE OF NON EXECUTIVE DIRECTORS * Provide objective and independent advice to the Board to enable it to make better decisions in the interest of all shareholders * Bring a genuine independent perspective to enhance decision making * Provide value added input to strategy and strategic development * Act in the best interests of the company as a whole rather than any one particular group of shareholders * Assist in carrying out the duties of the Board, such as: * reviewing, approving and on-going monitoring of the strategic plan * reviewing organizational capability in relation to stated objectives * reviewing financial performance against targets * raising capital * reviewing any major changes in the company, such as financial and organization structure * providing advice on major investments/divestments to be made * monitoring legal, ethical, risk and environmental compliance where appropriate * Act as a catalyst for change...
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...Introduction The nomination and election of a board of directors is a critical event for an organization. Selecting the right individuals to comprise the board that will provide adequate oversight and ensure alignment of management to that of shareholders and stakeholders best interests is vital to the success of the company. This paper explores how boards are formed, how individuals become part of boards, the type of individuals that should comprise a board, CEO duality and the advantages and disadvantages of having non-executive board members. How Boards are formed When forming a board of directors the c-suite should see the board and its members as a strategic partner rather than as a necessary requirement a corporation must have. The initial question that must be answered when considering forming a board of directors is what type of board does your organization need and select appropriate board leadership that meets the needs of your organization. In forming a board of directors many things must be taken into consideration such as the composition of the board, the number of board members, committee structure, roles and responsibilities, evaluation metrics for board performance and meeting frequency. Each of these elements will lead to the success of the board creating a strong platform for corporate governance. How do individuals become part of the Board of directors (Methods / Process)? In Canada upon incorporation of a company the incorporator...
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...revealed by the corporate scandals of recent times? Introduction> In UK there are the sole trader, the partnerships, the companies and the joint venture, structure businesses. For the sole trader and the partnerships because the businesses are controlled by the owners and they work for the benefit of the owners, it has not been necessary to have increased measures for the protection of the owners benefit. In the companies though that it is a different legal entity, not related to the persons that initially established it, there is a need for human representatives that would manage the company in benefit for the shareholders and stakeholders. The management of the company is on the hands of the board of directors and the general meeting. The problem is thought that the directors have extensive powers and they might use them in their benefit. Therefore rules are constructed by the companies themselves to control a...
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...should be an equal number of executive and non-executive directors (inclusive of independent non-executive directors) in the Board of Directors. However, based on the hierarchy of the Board of Directors in Flat Cargo Berhad, there are more executive directors than non-executive directors. It is unhealthy scenario as non-executive directors’ views might not be taken into consideration in the company’s important decision making process as they have the minority say. On the other hand the Code for an audit committee states that there should at least be 3 members of whom the majority of them should be independent and all members should be non-executive directors. Although the audit committee of Flat Cargo Berhad reveals that the majority of the committee consist of independent directors but they are all not non-executive member. Therefore, Mr. Ali Bin Ahmad is not a suitable candidate of the committee. We should understand the roles of Executive and Non-Executive Directors. As we know, Executive Directors are the internal member of the company who are involve in decision making of the management team and daily operation. Non-Executive Directors are the outside director who may hold or may not hold a share in the company and they may be hired due to their expertise and entitled for sitting fees for attending the meeting. However, they play an important role in the company’s decision making in terms of selection of the board of directors and their remuneration. Therefore...
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...have recently been updated in order to ensure that they remain at the forefront of best business practice. Every Group company and every employee worldwide is expected to live up to them. In addition, the principles set out within the Statement of Business Principles are designed to help meet the expectations placed on the company by various stakeholders. Both documents are available from the Company Secretary and on batm.com. PRINCIPLE 1 Establish clear roles and responsibilities: Role of chairman and CEO There should be a clear division of the responsibilities at the head of the company between the running of the board and the executive responsibility for the running of the company’s business. No individual should have unfettered powers of decision. The roles of chairman and chief executive should not be exercised by the same individual. The division of responsibilities between the chairman and chief executive should be clearly established, set out in writing and agreed by the board. The Chairman and the Chief Executive are separate individuals (Datuk Mohamad Salim Bin Fateh Din - Chairman, Stefano Clini (effective...
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...Difference between non executive director and executive Executive directors are concerned with the actual management. Non- executive do not have executive management responsibilities but are concerned with general management policy and monitoring of executive director. Both owe the same duties to the company (s170- s177) Non- executive director According the Code, the board should include an appropriate combination of executive and non- executive directors, so that not any individual or small group of individuals dominates the boards’ decision making. It should have the appropriate balance of skills, experience, independence and knowledge of the company to enable them to discharge their respective duties and responsibilities. With respect to the appointment procedure, non should be selected through a formal process. Any term beyond 6 years should be subject to particularly rigorous review and should take into account the need for progressive refreshing the board. The Code recommends that at least half of the members of the board, excluding the chairman, should be independent non. A smaller company should have at least 2 non. The Code, non-executive directors should be capable of providing an independent view of the board and challenging or questions the executive decisions. The presence of independent non-executive directors on the board can mitigate agency costs. The board now is required to identify in the annual report each non-executive director it considers is...
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...It is widely accepted that the presence of independent directors in the boardroom improves the quality of corporate governance. Accordingly, corporate governance mechanisms all over the globe, including in India, focus on 'independent directors'. The Companies Bill 2011 includes number of new provisions related to independent directors. It includes a 'Code For Independent Directors' (Schedule IV). According to the Bill an independent director is a director other than a managing director or a whole-time director or a nominee director, who is not a promoter and who fulfils certain conditions specified in the Bill. Primarily he/she does not have any pecuniary relationship with the company or he/she, with relatives, does not hold more than two percent of the voting power of the company. The Bill describes an independent director as a person of integrity, who possesses relevant expertise and experience. The government expects independent directors to bring an independent judgment to bear on the Board's deliberations especially on issues of strategy, performance, risk management, resources, key appointments and standards of conduct; and to bring an objective view in the evaluation of the performance of board and management. As per the Companies Bill, their responsibility is to safeguard the interest of stakeholders, particularly minority shareholders and to balance conflicting interests of stakeholders. Balancing the conflicting interest is a tricky job and most experts believe that...
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...CODE OF CORPORATE GOVERNANCE The need for a Code was inspired in part by a desire for the private sector to initiate and lead a review and to establish reforms of standards of corporate governance at a micro level. This is based on the belief that in some aspects, self-regulation is preferable and the standards developed by those involved may be more acceptable and thus more enduring. 1.3 The Code essentially aims to set out principles and best practices on structures and processes that companies may use in their operations towards achieving the optimal governance framework. These structures and processes exist at a micro-level which include issues such as the composition of the board, procedures for recruiting new directors, remuneration of directors, the use of board committees, their mandates and their activities. 1.4 The significance of the Code is that it allows for a more constructive and flexible response to raise standards in corporate governance as opposed to the more black and white response engendered by statute or regulation. It is in recognition of the fact that there are aspects of corporate governance where statutory regulation, is necessary and others where self-regulation, complemented by market regulation is more appropriate. 1.5 The impact the Code will have in raising standards of corporate governance can be seen from the experiences of other jurisdictions. To quote the Hampel Committee1, “... it is generally accepted that implementation of the...
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...20th Century, the board of directors were being perceived as an independent organ of the company rather than as mere agents of the shareholders who acted on their instructions. A further divergence of interests resulted from the increased trade of publically listed companies, resulting in further geographical spread of shareholders whose shares were likely to be smaller. This made the link between ownership and management more remote and harder to govern. Varying share sizes also meant that an inequality of voting rights between shareholders presented further problems, which are not present in company structures where the ownership and control are vested in the same people. This separation of shareholders (owners), from the management (directors), resulted in what has been dubbed the ‘agency problem'. The directors of the company are managers of the shareholders' capital, rather than their own; this therefore presents an obvious threat to shareholder's interests, since directors may well act in their own interests and not that of the shareholders. Berle and Means observed that as the number of PLC's grew and their shareholders became increasingly geographically, economically and characteristically diverse; the separation between ownership and management intensified and power shifted towards directors. This power was sometimes abused. Part of the UK's legislative response to this problem was through s172 of the Companies Act 2006, which obliges directors to...
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...Koprat. 346.5950926 CONTENTS PAGES INTRODUCTION PART 1 PART 2 PART 3 PART 4 1-6 PRINCIPLES OF CORPORATE GOVERNANCE 7-8 BEST PRACTICES IN CORPORATE GOVERNANCE 9-15 PRINCIPLES AND BEST PRACTICES FOR OTHER CORPORATE PARTICIPANTS 16 EXPLANATORY 17-47 APPENDICES JPK WORKING GROUP 1 48-49 MEMBERSHIP OF THE COMMITTEE 50 GC GC INTRODUCTION The Code essentially aims to set out principles and best practices on structures and processes that companies may use in their operations towards achieving the optimal governance framework. These structures and processes exist at a micro-level which include issues such as the composition of the board, procedures for recruiting new directors, remuneration of directors, the use of board committees, their mandates and their activities. 1.4 The significance of the Code is that it allows for a more constructive and flexible response to raise standards in corporate...
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...As you have seen already, companies have always been subject to quite strict regulation. Thus there are detailed requirements in relation to company formation, corporate administration and corporate finance. Despite all this regulation a number of issues have continued to cause considerable unrest and political controversy. The main concerns have centred on the apparent lack of effective control of directors of public listed companies which have manifested themselves in perceived excessive remuneration packages and mismanagement leading to a number of high-profile corporate collapses. Public listed companies employ thousands of employees and are the recipients of billions of pounds in investment by individuals and institutional investors such as pension funds. It follows that all governments, in the UK, in Europe and throughout the world, consider it crucial that public confidence in such companies is maintained. The attempts to effectively control the remuneration of directors and the activities of directors in their management of public companies so as to avoid high profile scandals are known as corporate governance. It should be noted that corporate governance is not static, but rather develops to meet the urgent issues of the day. Thus, for example, the effect of corporate activities upon the environment now falls to be included within the ambit of corporate governance. What is Corporate Governance? The term “corporate governance” is not defined by legislation...
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...Independent Advice • Independent legal or other professional advice Audit Committee • Audit Committee Charter OHS & Environmental Risk Committee • OHS & Environmental Risk Charter Oversight through reporting • External auditors External Auditor Policy • Internal Audit • Board Charter • Board Tenure Policy • Board Composition, Appointment, Induction & Election • Charter of Director Independence • Delegation of Authority • Performance Evaluation Process • Policy for Transactions with Chevron • Risk Management Summary • Continuous Disclosure Policy • Securities Trading Policy • Shareholder Communications Policy • Code of Conduct • Diversity and Inclusion Policy Human Resources Committee • Human Resources Committee Charter Delegation Accountability Accountability Assurance Delegation 4 Caltex Leadership Team (CLT) Nomination Committee • Nomination Committee Charter The CG Framework is regularly reviewed and updated in response to changes in Caltex’s business, Australian corporate governance practice and the law. 1. The Board 1.1 Role of the Board The Board...
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... within them during the course of the financial year ended 30 June 2015. A copy of the ASX Governance Principles can be found on ASX’s website, www.asx.com.au The Company is fully supportive of the ‘if not, why not’ disclosure‐based approach to governance adopted by the ASX Governance Principles and the recognition within them that there is no single model of corporate governance and that good corporate governance practice is not restricted to adopting the recommendations contained in the ASX Governance Principles. Principle 1: Laying solid foundations for management and oversight This Principle requires the Company to establish and disclose the respective roles and responsibilities of both the Board and management and how their performance is monitored and evaluated. Role of the Board The Company’s Corporate Objective, as determined by the Board, is to invest in Australian equities with a focus on stocks where there is an active options market. The Company uses principally exchange traded options to enhance income return to investors. Djerriwarrh aims to provide shareholders with attractive investment returns through access to a steady stream of fully franked dividends and enhancement of...
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...Mr Chiang Sang Sem is an Executive Chairman of the BONIA’s company and now he is the Executive Chairman cum Chief Executive Officer of the BONIA. He also is the founder of the BONIA. He was being a Chairman since 16 June 1994. His involve in the leather industry almost 30 years. He possesses knowledge, skills and experience in all aspects of the leatherwear trade. He is responsible for the overall business development and formulating the Group’s strategic plans and policies. To ensure that the Group is in line with the trend of the fashion and technological changes in the leatherwear and fashion accessories industry, he travels to Italy, France, Germany, Japan, Hong Kong, Taiwan, China, Bangkok, Vietnam and Indonesia. Besides that, his brothers, Chiang Sang Bon, Chiang Heng Kieng and his sons, Chiang Fong Yee and Chiang Fong Tat, are also the members of the Board. The role play by the board of director is to lead and control the Company with the ultimate objective of realising long-term shareholder value. Moreover, the Audit and Risk Management Committee shall assist the Board in examining the company’s matters pertaining the financial reporting, risk management and internal control, internal and external...
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