Acid
10-09-08, 12:12 PM
HI
Did you notice that entire P1 is about having a good board in the company which is made up of sufficient Executive Directors (ED) and Non-executive Directors (NED) which makes the board composition balanced and minimise the excessive power given to EDs in making judgments.
ED's should be competent and make right decisions which are primary for the benefit of the shareholders ( wealth maximization ) while consideration should be given to other stakeholders too considering their influence and stakes in the company.
Risks should be identified and managed . The board should take the primary responsibility for providing the assurance to shareholders that the internal controls are working effectively . For this purpose they may need to set up seperate functions like Audit committe and Risk committee.
There should be open and effectice communication between the Directors and Senior Management. The senior management should promote a 2-way feedback mechanism in which they provide information about the effectiveness of financial and other controls to the management and in return the management provides them assistance in improvements and recommendations and take action.
It is vital that the monitoring system is in place to ensure that the actions taken against identified control weakness are providing the results and there are no other areas which require attention.
So this is all for now and I will write about boards work when I grasp what its work is all about.
Regards
Did you notice that entire P1 is about having a good board in the company which is made up of sufficient Executive Directors (ED) and Non-executive Directors (NED) which makes the board composition balanced and minimise the excessive power given to EDs in making judgments.
ED's should be competent and make right decisions which are primary for the benefit of the shareholders ( wealth maximization ) while consideration should be given to other stakeholders too considering their influence and stakes in the company.
Risks should be identified and managed . The board should take the primary responsibility for providing the assurance to shareholders that the internal controls are working effectively . For this purpose they may need to set up seperate functions like Audit committe and Risk committee.
There should be open and effectice communication between the Directors and Senior Management. The senior management should promote a 2-way feedback mechanism in which they provide information about the effectiveness of financial and other controls to the management and in return the management provides them assistance in improvements and recommendations and take action.
It is vital that the monitoring system is in place to ensure that the actions taken against identified control weakness are providing the results and there are no other areas which require attention.
So this is all for now and I will write about boards work when I grasp what its work is all about.
Regards