Boards and Directors

The role and structure of the Board and Directors The role of board is governance, strategy and supervision and control. It is different from management which is involved in day-today operations. The wide range of responsibilities requires directors to have an inward-, outward- and forward-looking perspective. The nature and role of directors: executive, non-executive, nominee, inside, outside and independent, depends on the governance structure. Scams such as Maxwell highlight the risks associated with inside directors and the need of an independent board. Policy makers globally have pushed for more and more independent directors, but in spite of strict regulations ‘independence’ of independent directors remains a concern and their role unclear. Effective board leadership by the chairperson facilitates contribution to all directors in boardroom deliberations, improving corporate decisions leading to enhanced firm value. CEO duality allows for swift and efficient decision-making which can be extremely useful in crisis. However, abuse of this unfettered power has been the root cause of many corporate failures. As the board has enormous responsibilities, to reduce the burden and increase efficiency, some of the functions are delegated to committees such as audit, nomination and remuneration.