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In order to run an organization efficiently all the members of the organization should be delineated separate roles duties as well as responsibilities and all the members should liable to play the roles and duties as per the requirement. Especially, roles, responsibility and firm duties of the CEO and board of directors of the association must be well distinct and appropriately delegated so that all the necessary tasks of the organization can be performed effectively and it is most important for apt running of the company (Floyd, 2004). The companies’ proper running and necessary development widely depended on their board of directors and CEO’s as the entire important decisions on be-half of the organization used to be taken by the board of director’s and CEO’s of the company. Therefore, the board of directors and the CEO’s of the companies are liable to the shareholders of the companies and they have to report the shareholder about the changing missions and visions of the companies as well as the strategies they are taking in order to carry out the business operation efficiently so that the mission and greater vision of the organization can be accomplished. In case of any negligence or misconduct from the board of directors and CEO’s of the organizations are a punishable offence and the constitutional law charge them for any misconduct (Friedman and Miles, 2006).
The Governments also define the roles, responsibility and firm duties of the CEO and board of directors of the organizations. However, the business cultures of the organizations are not always competent with the government or the regulatory boards defined rules and responsibilities. In Australia the tension between the ASIC and board of the director of the organization have been escalated after the cases of Westpac Banking Corp. and ANZ Banking against regulatory board of ASIC.
The board of directors of a company play important roles in an organization and largely responsible for the growth of the organization and protect the interest of the shareholder by providing reasonable contribution in the routine operations of the company. The BOD is also responsible for organising the annual common conference where the members of BOD have to provide necessary report to the shareholders about the development plan of the organization (Hill, 2005). It ensures the growth of the corporation by carrying out the business affairs of the company and focusing on accomplishing the interest of the stakeholders as well as shareholders. The board should also take care of the issues as well as threats related to corporate business ethics, organization social responsibility along with corporate governance. The main role of BOD is to determine the vision and mission of the company, reviewing the goals and policies of the company. They also play an important role in evaluating and reviewing future opportunities, risks and threats in the market environment and analysing strengths and weakness of the company. The business plans and strategies are also prepared by the board of directors and they are responsible to ensure that the structure and capability of the organization are appropriately implemented within the organization (Jacobs, 2009). The authorities are also delegated by them to the management members and evaluate and monitor the strategies, business plans and strategies. The internal controls are effectively managed by the board of directors and establish effective communication with the senior management. The interest and needs of the stakeholders and shareholders should be managed and controlled by the BOD. The business structure of an organization is made by the board of directors and look after the internal and external operations of the company (Kaushik and Bhatnagar, 2008). The law imposes rules, regulations and policies to prevent abuses used by the directors. They are also responsible to keep proper accounting book of record and act to increase the value of employees and stakeholders. Therefore, it is the accountability plus duty of the BOD to manage the internal and external stakeholders as well as runs the organization on the basis of plans and strategies.
The chief Executive Officer (CEO) is main responsible for the development of an organization and execution of the long term strategy with the view to create value for the shareholder. The management decisions is also take by the CEO as well as also establishes healthy relationship with the employees, shareholders, public, government authorities and other stakeholders (Phillips and Freeman, 2010). The responsibilities and duties of CEO are as follows:
The CEO is responsible for the development of an organization as well as plays an important role in preparing the structure of the business as well as building healthy relationships with the stakeholders. The company rules and policies are also managed by them. Therefore, it is the responsibility and duty of the CEO to prepare structure, strategies and building healthy relationship with the stakeholders and shareholders (Schermerhorn, 2005).
The board of directors of the organizations and the CEO’s should be aware of their roles, duties and responsibilities and should play their defined roles as per the need of the organizations as they are liable for the appropriate functioning of the business activities of the companies. The appropriate carry out of the business largely depend of the performance of the BOD plus the CEO’s of the company and the shareholders benefits widely depend on the performance of the BOD along with CEO’s of the company. Therefore, it is essential to define the roles, responsibilities and duties of the BOD and CEO of the companies and they should strictly follow the role otherwise they should be punished by the law as shareholders benefits largely depend on their performance.
Corporate governance indications were widely available about 25 years ago. It provides the ways for the simple emerging of the strategies that helps the companies to appropriately run the performance with the creation of the fruitful performance service. It also helps in the creation of the effective performance that helps in the creation of the simple approaches with the creation of strategies by the enhancement of the indicators (Anon, 2016). For this development of the indicators, the creation of the focus on the development of the strategies with appropriate implementation helps in focusing on the customers and thereby the outperformance of the companies can be focused. Apart from this, the explanation of the increment of focus on the governance by the small number of the activist by some fund managers which means that the well governed companies’ means to trade on the basis of the well governed companies with trading on higher valuations (Hilb, 2005).
Asset manager is considered to have several key ranges of the fiduciary duties which help to carry out several key merits and advantages for the clients depending on the client status (Anon, 2016). Good corporate governance helps to provide correct and reliable facts and figure of financial data and thus help the company to gain good positive image. It is found that providing external audit report of the financial statement help to provide accurate and reliable facts and figure of the company annual report. This also helps the investor to get a clear and precise idea about the company financial position in the market and thus also help to provide the corporate governance status of the company. Performance of the investor return can be determined from several sources such as global asset allocation, segment selection and several key security selections but it is very much essential to link one source of performance to relate with companies to assure the highest rate of return (Rushworth, 2010). The key report on corporate governance and the long term investing is considered to be one of the major factor in succinctly made the invest return good and profitable. Seven prime areas of the cooperate governance which help to throw light on the highest investor return are as follows,
Ensuring equality of the shareholders with their respective right and code of conduct to manage and control the ethics and also help to securing the overall interest of the shareholder with minimum shares helps to generate and provide good corporate governance.
Preventing the leverage, however the minimum leverage is found to be varying from different segment or sc tor and will considerable having different economic and company overall lifecycles (Thenmozhi and Narayanan, 2016).
The assurance of the companies which have correct risk management system with a high level of legal support helps to provide a acute financial service to their investor with high return.
More qualitative areas of governance are,
Focusing on environment issues helps to build up a positive brand image of the company and thus help the shareholder should engage companies to persuade on the green policies and thus manage their corporate social responsibility which eventually have positive impact on their profit (Chen, Li and Shapiro, 2010). Financial report of the company is considered to be the vital part as it help the investor to mange and analyse the risk related in investing and with the help of external audit report which is considered to be a good sign of the corporate governance help the investor to trust the company and invest irrespective of the loss or profit and the correct financial report help the investor to calculate and manage the financial ratio which eventually help them to avoid risk and gain profit.
The concern made by the AICD for the investors provides the increment of the good corporate value for the investors with the creation of the good corporate governance in their investment decision making models (Chen, Li and Shapiro, 2010). It henceforth enhances the practices that are made by the good corporate practices with the creation of the good corporate governance system schemes and thereby it also helps in the maximization of the investor returns. Henceforth the recommendations that made in order to make the development of the companies with carrying out the good corporate governance practices for maximizing the investors returns are as follows:-
The good strategy also determines the good support to lump the aspects of the governance into a single indicator and thereby it also helps in the buying highest scores to the broad market with the help of the appropriate approaches taken (Kim and Nofsinger, 2007). Henceforth the Assessment of the evidences that good corporate governance is related with high investor returns and thereby the recommendations also show the appropriate enhancements of the corporate governance rules with the creation of the appropriate strategies.
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