Advocacy Groups and Corporate Social Responsibility (CSR)
We have seen how corporations need to embrace CSR as a paradigm if the challenges of the 21st century have to be met. We have also examined the role of the media in championing CSR. In this article, we look at how Advocacy Groups and Pressure Groups like Greenpeace and Media Lens along with other […]
E Commerce related Technologies
A layman using internet is overwhelmed by the sheer amount of information that he or she is able to access in an instant. Little do people know that the so called information high way is a culmination of thousands of networks, multiple technologies, platforms, applications and programmes working together in co-ordination to deliver information to […]
The Internet and the marketing mix
Introduction The marketing mix refers to usage of the four Ps of marketing which are Product, Price, Place and Promotion. All the marketing strategies are developed around the framework of fours Ps. With the advent and progress of service industry elements like People, Process and Physical evidence were added to the traditional marketing mix. E-commerce […]
Newsletters, Press Releases, and Writing for the Press
Press Releases and their Importance The previous articles discussed the various aspects of media and the role of media in shaping public opinion. We had also discussed how press conferences and press meets are to be organized and listed some points for the successful media management strategies. Continuing in the same vein, this article discusses […]
The Making of Brand Leaders
Every Management student and future Business Manager would do well to study and understand more about how certain Organizations build brand leadership and keep growing. Some of the global brand names like Apple, Sony, Reebok, Nike, Samsung, and companies like Dell, IBM, HP, Xerox, GE, Motorola not to forget a host of other technology Companies […]
Any public limited or a private company needs to have a board of directors which would ratify the management decisions taken by the leadership. These decisions can be financial or operational that affects the day to day running of the company. Further, the board of directors is expected to give a direction to the company in terms of strategic and visionary terms as to how the company expects to grow without having to abandon the ethical and normative rules of conduct. Note the emphasis on the term ethical and normative rules as the board of directors is the final arbiter of decisions taken by the company and hence, they must only approve a certain decision only when they are convinced that it would be in the best interests of the company and its shareholders.
The board of directors is often held responsible for the decisions taken by the company and hence, it is answerable to the shareholders as well as the regulators. In this context, it becomes necessary for the board of directors to be composed of individuals of exceptional abilities and leadership traits as well as being visionary.
The role of the board of directors can be summed up in one single sentence: the buck stops with them and hence they are the final authority as far as the company is concerned. The duties of the board of directors are similarly to be the ones who would take the decisions that have the stamp of authority and hence become the yardstick by which the company is judged.
Apart from these roles and duties, the board of directors is also answerable to the shareholders and the regulators. So, this means that the board of directors must take decisions that are in the larger interests of the shareholders and they must protect the interests of the shareholders at all costs. Further, whenever there is a scandal in the company, the regulators write to the board of directors so as to elicit information on what happened. For instance, when the Satyam scandal broke, the regulators and the press turned to the board of directors for guidance and information. It is another matter that in this particular case, the board was compromised as well.
This brings us to the final aspect that the board of directors has to have a coherent approach towards managing the company and hence, must be consensual in its decision making. Unless the board of directors agrees on decisions either unanimously or through a majority vote, there cannot be movement for the company. Hence, it is clear that boardroom battles and directors with hidden agendas be avoided to the extent possible in the larger interests of good corporate governance. Since the board has the final say in matters concerning the company, the CEO and the leadership have to present the information truthfully and accurately. In the case of Satyam, there were allegations that the CEO and some of the compromised members of the board kept the other directors in the dark about some key decisions. This should not be allowed to happen.
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