In order for a company to exist, it has to be set up and registered with the appropriate company authority.
Once registered, the company is regarded as a legal person, with legal rights and obligations. A company’s
existence and organization are continuously scrutinized through a well-established set of rules, laws, andpolicies that govern the way in which the company is run and controlled. This is known as
Corporate governanceexists to protect the shareholders of a company. It also aims to preserve the reputationof a company and its business against any fraudulent acts committed by its directors and officers. The
directors of a company must always make decisions objectively, in the best interests of the company’s
business and its shareholders. They have the responsibility to run the company successfully and bring inprofits for the shareholders.
is a term sometimes applied to thechief executive officer(CEO)ormanaging directorof anorganization,company,orcorporation.The role of the Executive Director is to
design, develop and implement strategic plans for their organization in a cost-effective and time-efficientmanner. The Executive Director is also responsible for the day-to-day operation of the organization, includingmanaging committees and staff and developing business plans in collaboration with the board for the futureof the organization.
of a firm who is not an executive director and, therefore, does notparticipate in the day-to-day management of the firm. He or she is usually involved in planning and policymaking, and is sometimes included to lend prestige to the firm due to his or her standing in the community.Non-executive directors are expected to monitor and challenge the performance of the executive directorsand the management, and to take a determined stand in the interests of the firm and its stakeholders. Theyare generally held equally liable as the executive directors under certain statutory requirements such as taxlaws. Also called external director, independent director, or outside director..A non-
executive’s role is less
hands-on. A non-executive director may have less experience and less knowledge than an executive. However,the benefit here is that a non-executive can bring objectivity and an external awareness to the board. Non-executive directors are not usually involved with day-to-day management, however, the smaller the company,the more likely it is that there will be some hands-on work. The non-
executive’s role is an over
-viewer andwhistle blower, ensuring adherence to good practice, respect for the interests of other stakeholders andadherence to the process of boardroom discipline. Non-
executives are often thought of as “advisers” although
this is not the case. The role is larger than this
the non-exec is a director and shares the legal duties andresponsibilities of the executive directors. As far as corporate governance is concerned, non-executives areusually associated with Independence and may be self-employed