AU Business Ethics 2022

CHAPTER FOUR
AN OVERVIEW OF CORPORATE GOVERNANCE
4.1. Definition
Corporate Governance refers to the way a corporation is governed. It is the technique by which companies
are directed and managed. It means carrying the business as per the stakeholders’ desires.
Corporate governance is defined as an act of controlling, directing and evaluating the activities of an
organization.
Corporate governance is a set of rules, regulations, or principles that define how companies should be
controlled and directed.
Moreover, corporate governance has many definitions; depending on the scope it is granted.
According to the Cadbury Committee Report in 1992 had a clear but narrow definition, “Corporate
governance is the system/process by which companies are directed and controlled.
According to Adam Smith definition, corporate governance can be understood as the system through which
shareholders are assured that their interest will be taken care of by management. In a much wider term,
corporate governance was defined as the methods by which suppliers of finance control managers in order to
ensure that their capital cannot be expropriated and that they earn a return on their investment
According to Shleifer and Vishny, ‘Corporate governance deals with the ways in which suppliers of finance
to corporations to assure themselves of getting a return on their investment.’
An article from Financial Times has defined corporate governance as ‘the relationship of a company to its
shareholders or, more broadly, as its relationship to society’.
According to the J. Wolfensohn, ‘Corporate governance is about promoting corporate fairness,
transparency and accountability.’
4.2. The Need for Corporate Governance
 To protect shareholders right
 Ensure transparency
 Good corporate governance ensures corporate success and economic growth.
 Strong corporate governance maintains investors’ confidence, as a result of which, company can raise
capital efficiently and effectively.
 It lowers the capital cost.
 There is a positive impact on the share price.
 Good corporate governance also minimizes wastages, corruption, risks and mismanagement.
 To ensure the equitable treatment of all shareholders.

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 To recognize the rights of stakeholders as established by law and promote the concept of good
corporate citizenship.
 The board is balance as regards the representation of adequate number of nonexecutive and
independent directors who will take care of their interests and wellbeing of all the stakeholders
 The board adopts transparent procedures and practices and arrives at decisions on the strength of
adequate information
FOUNDATIONS OF CORPORATE GOVERNANCE SYSTEMS
Good corporate governance is the glue that holds together responsible business practices, which ensures
positive workplace management, marketplace responsibility, environmental stewardship, community
engagement, and sustained financial performance. The most important corporate governance devices include
the board of directors, the shareholders, the market for corporate control, the capital structure, executive
compensation, and, not least, competition at various firm levels.
EXECUTIVE COMPENSATION
Executive compensation, also known as executive pay, refers to remuneration packages specifically
designed for business leaders, senior management and executive-level employees of a company.
Compensation refers to as a wide range of financial and non-financial rewards given to employees for
their services rendered to the organization.
Executive compensation is composed of both the financial compensation (executive pay) and other non-
financial benefits received by an executive from their employing firm in return for their service.
It is paid in the form of wages, salaries and employee benefits such as paid vacation, insurance, maternity
leave, free traveling facility, retirement benefits, etc.
The variable component of compensation or remuneration can be broken down into three time frames:
 short-term incentives (STIs) .Example rank
 medium-term incentives (MTIs)
 long-term incentive plans (LTIPs) .example stock option
CORPORATE GOVERNANCE MECHANISMS
Corporate governance mechanisms are the policies, guidelines, and controls to manage an organization
and reduce inefficiencies. Corporate governance mechanisms are the policies, guidelines, and controls to
manage an organization and reduce inefficiencies.
Corporate governance mechanisms or variables are many but frequently considered mechanisms are: board
composition, board committees, CEO duality/separation, board meetings and the extent of shareholder
concentration.

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4.3. Roles and Responsibilities of Corporate Governance Actors
We focus on how five main governance actors (board of directors, top management teams, government
employees and shareholders) behave towards the firm.
Effective corporate governance requires a clear understanding of the respective roles of the board,
management and shareholders; their relationships with each other; and their relationships with other corporate
stakeholders.
የድርጅት አስተዳደር ተዋናዮች ሚናዎች እና ኃላፊነቶች

አምስት ዋና ዋና የአስተዳደር አካላት (የዳይሬክተሮች ቦርድ፣ ከፍተኛ የአመራር ቡድኖች፣ የመንግስት ሰራተኞች እና

ባለአክሲዮኖች) ለድርጅቱ እንዴት ባህሪ እንደሚኖራቸው ላይ እናተኩራለን።

ውጤታማ የድርጅት አስተዳደር የቦርዱ፣ የአመራር እና የባለአክሲዮኖችን ሚናዎች በግልፅ መረዳትን ይጠይቃል። እርስ በርስ

ያላቸውን ግንኙነት; እና ከሌሎች የድርጅት ባለድርሻ አካላት ጋር ያላቸው ግንኙነት።

4.3.1 Role of the Board of Directors in Corporate Governance
A board of directors (B of D) is the governing body of a company, elected by shareholders in the case of
public companies to set strategy and oversee management. The board typically meets at regular intervals.
Every public company must have a board of directors.
Board of directors is made up of individuals elected by a corporation's shareholders to oversee the
management of the corporation. There are various participants in the organization such as investors and
shareholders. They do not participate in the operations of the organization. Their main interest is to have a
proportion of the share in the income of the organization. The shareholders and investors have the right to
elect the board of directors of an organization in order to represent and protect their interests. The board of
directors receives regular reports on the financial position of the organization, key areas of the organizations’
operations and other issues.
የዳይሬክተሮች ቦርድ (B of D) የአንድ ኩባንያ የበላይ አካል ነው, በሕዝብ ኩባንያዎች ሁኔታ ውስጥ በባለአክሲዮኖች

የሚመረጠው ስትራቴጂ ለማውጣት እና አስተዳደርን ይቆጣጠራል. ቦርዱ በተለምዶ በየተወሰነ ጊዜ ይገናኛል። ማንኛውም

የህዝብ ኩባንያ የዳይሬክተሮች ቦርድ ሊኖረው ይገባል።

የዳይሬክተሮች ቦርድ የኮርፖሬሽኑን አስተዳደር በበላይነት እንዲቆጣጠሩ በኮርፖሬሽኑ ባለአክሲዮኖች የተመረጡ ግለሰቦችን

ያቀፈ ነው። በድርጅቱ ውስጥ እንደ ባለሀብቶች እና ባለአክሲዮኖች ያሉ የተለያዩ ተሳታፊዎች አሉ። በድርጅቱ ተግባራት

ውስጥ አይሳተፉም. ዋናው ፍላጎታቸው በድርጅቱ ገቢ ውስጥ ያለው ድርሻ ድርሻ እንዲኖረው ማድረግ ነው. ባለአክሲዮኖች

እና ባለሀብቶች ጥቅማቸውን ለመወከል እና ለመጠበቅ የድርጅቱን የዳይሬክተሮች ቦርድ የመምረጥ መብት አላቸው.

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የዳይሬክተሮች ቦርድ በድርጅቱ የፋይናንስ አቋም, በድርጅቶቹ ዋና ዋና ቦታዎች እና ሌሎች ጉዳዮች ላይ መደበኛ ሪፖርቶችን

ይቀበላል.

Responsibilities of the board of directors

Some of responsibilities of the board of directors are as follows:
1. Organization strategic planning, monitoring and controlling
The board may be responsible for creating and reviewing the mission and purpose statements that articulates
the organization’s goals, means, and primary constituents served. Boards must actively participate in an
overall strategic planning process and monitoring of the plan’s goals. As part of this, they may also monitor
the organizations’ programs and services to determine which are consistent with the organization’s mission
and monitor their effectiveness.

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ቦርዱ የድርጅቱን ግቦች፣ መንገዶች እና ዋና ዋና አካላት የሚገልጹ ተልዕኮዎችን እና የዓላማ መግለጫዎችን የመፍጠር እና

የመገምገም ሃላፊነት አለበት። ቦርዶች በአጠቃላይ የስትራቴጂክ እቅድ ሂደት እና የእቅዱን ግቦች መከታተል በንቃት መሳተፍ

አለባቸው። የዚሁ አካል ከሆኑት ከድርጅቱ ተልዕኮ ጋር የሚጣጣሙ እና ውጤታማነታቸውን ለመከታተል የድርጅቶቹን

ፕሮግራሞች እና አገልግሎቶች መከታተል ይችላሉ።

2. Protect assets and provide financial oversight 
Boards need to ensure that they’re protecting the organization’s assets and managing them responsibly,
including carrying out its fiduciary responsibilities. For example, a board should work with the chief financial
officer to establish a budget, ensure proper controls are in place for incoming and outgoing funds and review
the organization’s financial statements. This may also include establishing an audit committee and completing
an internal audit every year.
ቦርዶች የድርጅቱን ንብረቶች እየጠበቁ መሆናቸውን እና እነሱን በኃላፊነት መምራት፣ ታማኝ ኃላፊነቱን መወጣትን ጨምሮ

ማረጋገጥ አለባቸው። ለምሳሌ, አንድ ቦርድ በጀት ለማቋቋም ከዋናው የፋይናንስ ኦፊሰር ጋር መስራት አለበት, ለገቢ እና

ወጪ ገንዘቦች ትክክለኛ ቁጥጥሮች መኖራቸውን እና የድርጅቱን የሂሳብ መግለጫዎች መገምገም አለበት. ይህ የኦዲት ኮሚቴ

ማቋቋም እና የውስጥ ኦዲት በየአመቱ ማጠናቀቅን ሊያካትት ይችላል።

3. Serve on committees or working groups
Board members should serve on committees or task forces and offer to take on special assignments, as this is
where the bulk of board work gets done. Example committees include governance, finance, executive and
audit committees. Boards can also create ad hoc committees or working groups to accomplish specific goals
or tasks. 

3. በኮሚቴዎች ወይም በስራ ቡድኖች ውስጥ አገልግሉ።

የቦርድ አባላት በኮሚቴዎች ወይም በግብረ-ሃይል ውስጥ ማገልገል እና ልዩ ስራዎችን እንዲወስዱ ማቅረብ አለባቸው,

ምክንያቱም የቦርድ ስራው አብዛኛው የሚከናወንበት ነው. የአስተዳደር፣ የፋይናንስ፣ የስራ አስፈፃሚ እና የኦዲት

ኮሚቴዎችን ለአብነት ያህል ኮሚቴዎች ያጠቃልላል። ቦርዶች የተወሰኑ ግቦችን ወይም ተግባሮችን ለማከናወን ጊዜያዊ

ኮሚቴዎችን ወይም የስራ ቡድኖችን መፍጠር ይችላሉ።

4. Select, support and review performance of the chief executive
The board is responsible for vetting and selecting a qualified candidate for the CEO or executive director to
run the day-to-day management activities of the organization. Once appointed, the board will collaboratively
work with the chief executive to meet the organization’s short and long-term plans. On an annual basis, the

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board of directors is also responsible for evaluating the performance of the CEO. The bulk of this work is
most likely done through a committee, in which they will present their findings to the full board. 

4. የዋና ሥራ አስፈፃሚውን መምረጥ, መደገፍ እና አፈፃፀም መገምገም

ቦርዱ የድርጅቱን የእለት ተእለት የአመራር ስራዎችን ለማካሄድ ለዋና ስራ አስፈፃሚ ወይም ስራ አስፈፃሚ ብቁ እጩን

የማጣራት እና የመምረጥ ሃላፊነት አለበት። ከተሾሙ በኋላ ቦርዱ የድርጅቱን የአጭር እና የረጅም ጊዜ እቅዶችን ለማሟላት

ከዋናው ሥራ አስፈፃሚ ጋር በመተባበር ይሠራል. በየዓመቱ የዳይሬክተሮች ቦርድ የዋና ሥራ አስፈጻሚውን አፈጻጸም

የመገምገም ኃላፊነት አለበት። የዚህ ሥራ አብዛኛው የሚሠራው በኮሚቴ አማካይነት ነው፣ በዚህም ውጤታቸውን ለሙሉ

ቦርድ ያቀርባሉ።
5. Board member recruitment and board performance evaluation
The board is responsible for recruiting, nominating and appointing new board members with the right mix of
skills, knowledge and experience. Most boards assess their performance on an annual basis to identify gaps
and form a strategic plan. An important topic for today’s boards is to address diversity and inclusion in their
board recruitment and selection

5. የቦርድ አባላት ምልመላ እና የቦርድ አፈጻጸም ግምገማ

ቦርዱ ትክክለኛ የክህሎት፣ የእውቀትና የልምድ ቅይጥ አባላትን የመመልመል፣ የመሾም እና የመሾም ኃላፊነት አለበት።

አብዛኞቹ ቦርዶች አፈጻጸማቸውን የሚገመግሙት ክፍተቶችን በመለየት የስትራቴጂክ እቅድ ለማውጣት ነው። ለዛሬዎቹ

ቦርዶች ጠቃሚ ርዕስ በቦርድ ምልመላ እና ምርጫ ውስጥ ልዩነትን እና ማካተትን ማስተናገድ ነው።
4.3.2. Role of top management in corporate governance
Top management refers to the Top-Level Management. Top-level managers include presidents, vice-
presidents, CEOs, general managers, and senior managers, etc. Top-level managers are responsible for
controlling the entire organization.
The board of directors occupies the top management whose prime concern is strategic management of the
organization. The top management is supervised by the president in coordination with the vice-president of
the organization. The relationship among these three groups is known as Corporate Governance.
ከፍተኛ አስተዳደር የከፍተኛ ደረጃ አስተዳደርን ያመለክታል። ከፍተኛ ደረጃ አስተዳዳሪዎች ፕሬዚዳንቶችን፣ ምክትል

ፕሬዚዳንቶችን፣ ዋና ስራ አስፈፃሚዎችን፣ ዋና ስራ አስኪያጆችን እና ከፍተኛ ስራ አስኪያጆችን ወዘተ ያጠቃልላል። ከፍተኛ

ደረጃ አስተዳዳሪዎች ድርጅቱን የመቆጣጠር ሃላፊነት አለባቸው።

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የዳይሬክተሮች ቦርድ ዋና ጉዳዩ የድርጅቱ ስትራቴጂካዊ አስተዳደር የሆነውን ከፍተኛ አመራርን ይይዛል። የበላይ አመራሩ

የሚቆጣጠረው ከድርጅቱ ምክትል ፕሬዝዳንት ጋር በመተባበር በፕሬዝዳንቱ ነው። በእነዚህ ሶስት ቡድኖች መካከል ያለው

ግንኙነት ኮርፖሬት አስተዳደር በመባል ይታወቃል

Responsibilities of Top Management
The responsibility of the top management is to get the objectives of an organization accomplished within the
organization and in the industry. Thus, the role and responsibility of the top management is multifaceted and
is directed towards the welfare of the organization. The development of the tasks of the top management are
developed by the analysis of objectives, strategies and fundamental activities of the organization .The top
management should primarily support two critical responsibilities. The two responsibilities are as follows:
የከፍተኛ አመራር ኃላፊነት በድርጅቱ ውስጥ እና በኢንዱስትሪው ውስጥ የተከናወነውን የድርጅቱን ዓላማዎች ማግኘት ነው.

ስለዚህ የከፍተኛ አመራር ሚና እና ኃላፊነት ዘርፈ ብዙ እና ለድርጅቱ ደህንነት ያተኮረ ነው። የከፍተኛ አመራሩ ተግባራት

እድገት የድርጅቱን ዓላማዎች ፣ ስልቶች እና መሰረታዊ ተግባራትን በመተንተን ነው ። የበላይ አመራሩ በዋናነት ሁለት ወሳኝ

ኃላፊነቶችን መደገፍ አለበት። ሁለቱ ኃላፊነቶች የሚከተሉት ናቸው።

A. Provision of executive leadership and strategic vision: Executive leadership means directing the
activities of the organization to accomplish its objectives. Strategic vision refers to the description of
the capabilities of the organization, which is generally described in the mission statement. The top
management defines the strategic vision of the organization to the employees. The enthusiasm and
passion for the organization comes from the top management. Top management must have clear
strategic vision, enthusiasm and dynamism. They possess three important characteristics that enable
them to command respect and alter the process of strategy formulation and its implementation:
ሀ. የአስፈፃሚ አመራር እና ስትራቴጂካዊ ራዕይ አቅርቦት፡- አስፈፃሚ አመራር ማለት የድርጅቱን ዓላማዎች

ለማሳካት እንቅስቃሴዎችን መምራት ማለት ነው። የስትራቴጂክ ራዕይ የድርጅቱን የአቅም መግለጫዎች

የሚያመለክት ሲሆን ይህም በአጠቃላይ በተልዕኮው መግለጫ ውስጥ ተገልጿል. ከፍተኛው አመራር የድርጅቱን

ስልታዊ ራዕይ ለሰራተኞቹ ይገልፃል። ለድርጅቱ ያለው ጉጉት እና ፍቅር የሚመጣው ከከፍተኛ አመራር ነው. ከፍተኛ

አመራር ግልጽ ስልታዊ እይታ፣ ቅንዓት እና ንቁነት ሊኖረው ይገባል። የስትራቴጂ ቀረጻውን ሂደትና አተገባበሩን

ለመከባበር እና ለመለወጥ የሚያስችላቸው ሶስት ጠቃሚ ባህሪያት አሏቸው፡-

 Articulation of strategic vision with strategy: The top management visualizes the organization as what
it is expected to become and not to what it already is. He adds a new aspect to the strategic activities
that enables the employees to refresh their working habits to attain new heights.

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 የስትራቴጂክ ራዕይን በስትራቴጂ መግለጽ፡- የበላይ አመራሩ ድርጅቱን ወደ መሆን የሚጠበቅበትን እንጂ ወደነበረበት

ደረጃ አይመለከትም። ሰራተኞቹ አዲስ ከፍታ ላይ ለመድረስ የስራ ልምዳቸውን እንዲያድሱ በሚያስችለው

ስትራቴጂያዊ እንቅስቃሴዎች ላይ አዲስ ገጽታ ይጨምራል።

 Makes guidelines for others to identify and follow: The behavior of the top management towards the
values concerning the objectives of the organization should be clear and must be communicated
constantly through his work and activities. If the top management behaves responsibly then the
employees trust in him and get inspired to work with the same enthusiasm
 • ሌሎች እንዲለዩ እና እንዲከተሏቸው መመሪያዎችን ያወጣል፡ የድርጅቱን ዓላማዎች በሚመለከቱ እሴቶች ላይ

የበላይ አመራሩ ባህሪ ግልጽ መሆን አለበት እና በስራው እና በተግባሩ በቋሚነት መተዋወቅ አለበት። የበላይ አመራሩ

በኃላፊነት ስሜት የሚመላለስ ከሆነ ሰራተኞቹ በእሱ ይታመናሉ እና በተመሳሳይ ተነሳሽነት ለመስራት ይነሳሳሉ.
 Communicate high performance level and confidence to the followers: Leadership of the managers of
an organization involves setting up of goals for the employees accompanied with challenges and
training his people for the same. He should provide his workforce with power and resources before
setting targets.
 ከፍተኛ የሥራ አፈጻጸም ደረጃን እና በራስ መተማመንን ለተከታዮቹ ማሳወቅ፡ የድርጅቱ ሥራ አስኪያጆች አመራር

ከችግሮች ጋር ለሠራተኞቹ ግቦችን ማውጣትና ሕዝቡን ለዚሁ ተግባር ማሰልጠን ያካትታል። ኢላማ ከማውጣቱ

በፊት ለሰራተኛው ሃይል እና ግብአት መስጠት አለበት።

B. Manage strategic planning process: In an organization, the characteristics of strategic planning are
same as that in learning organizations where ideas can come from any division of the organization.
Top management should encourage the planning process so that strategic management can work
effectively in the organization. Therefore, the top management’s responsibilities include evaluating
each unit’s proposed objective, planning strategies to seek how effectively it satiates the organizational
goals with respect to available resources and providing feedback.
ለ. የስትራቴጂክ እቅድ ሂደትን ማስተዳደር፡- በድርጅት ውስጥ የስትራቴጂክ እቅድ ባህሪያት ከየትኛውም የድርጅቱ

ክፍል ሀሳቦች ሊመጡባቸው ከሚችሉት የትምህርት ድርጅቶች ጋር ተመሳሳይ ነው። የስትራቴጂክ አስተዳደር

በድርጅቱ ውስጥ ውጤታማ በሆነ መንገድ እንዲሠራ ከፍተኛ አመራሮች የእቅድ ሂደቱን ማበረታታት አለባቸው.

ስለዚህ የከፍተኛ አመራር ኃላፊነቶች የእያንዳንዱን ክፍል የታቀደውን ዓላማ መገምገም ፣ ያሉትን ሀብቶች

በተመለከተ ድርጅታዊ ግቦችን ምን ያህል እንደሚያረካ ለመፈለግ ስልቶችን ማቀድ እና ግብረ መልስ መስጠትን

ያጠቃልላል።

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4.3.3. Role of the CEO in Corporate Governance
Any action that is taken by any individual in the organization can affect the firm’s operations to a great extent.
For example, if any individual is appointed as a team leader, then he has the responsibility to take certain
decisions that would help in the progress of his entire team. If an individual is provided with any sort of
power, then it is up to him to use it for the benefit of the organization or he can use the powers to fulfil his
own requirements. It is the same for CEOs in an organization.
በኮርፖሬት አስተዳደር ውስጥ ዋና ሥራ አስፈፃሚ ሚና

በድርጅቱ ውስጥ በማንኛውም ግለሰብ የሚወሰደው ማንኛውም እርምጃ የኩባንያውን አሠራር በእጅጉ ሊጎዳ ይችላል.

ለምሳሌ፣ ማንኛውም ግለሰብ የቡድን መሪ ሆኖ ከተሾመ ለቡድኑ አጠቃላይ እድገት የሚረዱ የተወሰኑ ውሳኔዎችን የመውሰድ

ሃላፊነት አለበት። አንድ ግለሰብ ማንኛውንም ዓይነት ሥልጣን ከተሰጠው ለድርጅቱ ጥቅም ማዋል ወይም ሥልጣኑን

ተጠቅሞ የራሱን መስፈርቶች ማሟላት ይችላል. በአንድ ድርጅት ውስጥ ዋና ሥራ አስፈፃሚዎች ተመሳሳይ ነው.
Organizations achieve great success in business because of their chief executive officer (CEO). The CEO
oversees the company's finances and strategic planning.
The powers of a CEO can greatly influence the working of an organization. Therefore, it is very important to
know about the powers of the CEO and how his powers can ultimately influence the results of an
organization. The CEO of an organization has a very important role to play in certain areas, which are:
1. Personal action
2. Handling of organizational politics
3. Role as a negotiator
4. Role as a communicator
5. Role as a role model
1. Personnel action
The CEO of a firm has the power to take personnel actions in a manner that is beneficial for an organization in
the following ways:
a) Ordering the employees: A CEO of an organization uses his authority to order the employees. The
employees of an organization are directed by a CEO to perform certain tasks at a defined period of
time. If any of the employees are disobedient or their actions are not very good, then the CEO has an
authority to throw him out of the organization. The ordering of employees is done to achieve the goals
and objectives of an organization. The ordering method, which is employed by the CEO, provides
certain benefits to the organization. When there is a need of any structural changes to be made in the
organization, then the ordering method is very helpful. For example, if an organization decides to

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implement a new and improved structure for managing the performance of the employees in the
organization, then the CEO has to just give instructions and train employees in operating the new
system.
ሀ) ሰራተኞቹን ማዘዝ፡- የድርጅቱ ዋና ስራ አስፈፃሚ ሰራተኞቹን ለማዘዝ ሥልጣኑን ይጠቀማል። የአንድ ድርጅት

ሰራተኞች በተወሰነ ጊዜ ውስጥ የተወሰኑ ተግባራትን እንዲያከናውኑ በዋና ሥራ አስፈፃሚ ይመራሉ. ከሠራተኞቹ

መካከል አንዳቸውም የማይታዘዙ ከሆነ ወይም ድርጊታቸው በጣም ጥሩ ካልሆነ, ዋና ሥራ አስፈፃሚው ከድርጅቱ

ውስጥ የመጣል ስልጣን አለው. የሰራተኞች ቅደም ተከተል የሚከናወነው የድርጅቱን ግቦች እና ዓላማዎች ለማሳካት

ነው. በዋና ሥራ አስፈፃሚው የሚሠራው የማዘዣ ዘዴ ለድርጅቱ የተወሰኑ ጥቅሞችን ይሰጣል. በድርጅቱ ውስጥ

ምንም ዓይነት መዋቅራዊ ለውጦችን ማድረግ በሚያስፈልግበት ጊዜ, የማዘዣ ዘዴው በጣም ጠቃሚ ነው. ለምሳሌ,

አንድ ድርጅት በድርጅቱ ውስጥ የሰራተኞችን አፈፃፀም ለመቆጣጠር አዲስ እና የተሻሻለ መዋቅር ለመተግበር

ከወሰነ, ዋና ሥራ አስፈፃሚው መመሪያ መስጠት እና በአዲሱ አሰራር ውስጥ ሰራተኞችን ማሰልጠን አለበት.
b) Making cultural changes: It is very difficult for a CEO to change the culture of an organization.
Cultural changes are those changes that are deeply rooted among the employees such as collective
thinking, and mindsets, which have become a part of the organizational working environment. For
bringing about cultural change in the organization, just ordering the employees will not help the CEO.
A CEO has to use the right approach for bringing about a change in the cultural mindset of the
employees. For bringing about a change, a CEO must look after certain agendas and the
communication network of an organization. If he finds any defects in the agendas or the
communication network, then he must rectify those defects in order to make cultural changes among
the employees and achieve the goals and objectives of the organization.

ለ) የባህል ለውጦችን ማድረግ፡- ዋና ሥራ አስፈፃሚ የድርጅቱን ባህል ለመቀየር በጣም ከባድ ነው። የባህል ለውጦች

በሠራተኞች መካከል ሥር የሰደዱ እንደ የጋራ አስተሳሰብ እና አስተሳሰብ ያሉ የድርጅት የሥራ አካባቢ አካል የሆኑ

ለውጦች ናቸው። በድርጅቱ ውስጥ የባህል ለውጥ ለማምጣት ሰራተኞቹን ማዘዝ ብቻ ዋና ሥራ አስፈፃሚውን

አይረዳም። አንድ ዋና ሥራ አስፈፃሚ በሠራተኞቹ የባህል አስተሳሰብ ላይ ለውጥ ለማምጣት ትክክለኛውን አካሄድ

መጠቀም አለበት። ለውጥ ለማምጣት ዋና ሥራ አስፈፃሚ የተወሰኑ አጀንዳዎችን እና የድርጅቱን የግንኙነት መረብ

መከታተል አለበት። በአጀንዳዎች ወይም በኮሙኒኬሽን አውታር ላይ ጉድለቶች ካገኘ በሠራተኞች መካከል ባህላዊ

ለውጦችን ለማድረግ እና የድርጅቱን ግቦች እና ዓላማዎች ለማሳካት እነዚህን ጉድለቶች ማስተካከል አለበት.

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c) Persuading the employees: A CEO of an organization influences the employees to perform certain
tasks in an efficient manner. If the employees find it difficult to perform certain tasks, then the CEO
looks after the problems that the employees face. After looking at all the difficulties, a CEO must
persuade the employees to work better and direct their efforts towards the achievement of the goals. A
CEO also negotiates with the employees if there is a situation of dispute between the employees and
the management.
ሐ) ሠራተኞቹን ማሳመን፡- የድርጅቱ ዋና ሥራ አስፈጻሚ ሠራተኞቹ የተወሰኑ ሥራዎችን በብቃት እንዲሠሩ

ተጽዕኖ ያሳድራል። ሰራተኞቹ አንዳንድ ስራዎችን ለመስራት አስቸጋሪ ሆኖ ካገኙት, ዋና ስራ አስፈፃሚው ሰራተኞቹ

የሚያጋጥሟቸውን ችግሮች ይመለከታል. ሁሉንም ችግሮች ከተመለከተ በኋላ ዋና ሥራ አስፈፃሚ ሠራተኞቹ

በተሻለ ሁኔታ እንዲሠሩ እና ጥረታቸውን ወደ ግቦቹ ስኬት እንዲመሩ ማሳመን አለበት። ዋና ሥራ አስፈፃሚም

በሠራተኛውና በአመራሩ መካከል አለመግባባት ከተፈጠረ ከሠራተኞቹ ጋር ይደራደራል።

d) Inducing the employees: A CEO also induces the employees to work towards the attainment of the
goals and objectives of an organization. There may be certain employees in an organization that may
not be performing well in accordance with the expectations of the organization. A CEO can induce the
employees by asking them to change their ways of working and thinking, so that organizational goals
can be achieved in a desired manner.
መ) ሰራተኞቹን ማበረታታት፡- ዋና ሥራ አስፈፃሚ ሠራተኞቹ የድርጅቱን ዓላማና ዓላማ ከግብ ለማድረስ እንዲሠሩ

ያነሳሳል። በድርጅት ውስጥ የተወሰኑ ሰራተኞች በድርጅቱ በሚጠበቀው መሰረት ጥሩ አፈፃፀም ላይኖራቸው

ይችላል. ዋና ሥራ አስፈፃሚ ሠራተኞቹን የሥራ እና የአስተሳሰብ ለውጥ እንዲያደርጉ በመጠየቅ ድርጅታዊ ግቦችን

በሚፈለገው መንገድ እንዲሳኩ መጠየቅ ይችላል።

2. Handling of organizational politics

The CEO must accept the fact that politics is certain in every organization. Pfeffer has defined politics as
‘those activities taken within organizations to acquire, develop and use power and other resources to obtain
one's preferred outcomes in a situation in which there is uncertainty or dissension about choices’. An
individual, subunit or department may have power within an organizational context at some period of time;
politics involves the exercise of power to get something accomplished, as well as those activities, which are
undertaken to expand the power already possessed, or the scope over which it can be exercised.

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Therefore, it is clear that political behaviour is designed and started to surmount opposition or resistance. If
there is no opposition, there is no need for politics. Opposition and resistance are bound to occur in all
organizations because of severe competition for scarce resources. Five major reasons that have strong
influence on the political orientation of organizations are:
ዋና ሥራ አስፈፃሚው ፖለቲካ በሁሉም ድርጅት ውስጥ እርግጠኛ መሆኑን መቀበል አለበት. ፕፌፈር ፖለቲካን ‘በምርጫ

ላይ እርግጠኛ ባልሆነ ሁኔታ ወይም አለመግባባት በሚፈጠርበት ሁኔታ ስልጣንን እና ሌሎች ሀብቶችን ለማግኘት፣ ለማዳበር

እና ለመጠቀም በድርጅቶች ውስጥ የሚደረጉ እንቅስቃሴዎች’ ሲል ገልፆታል። አንድ ግለሰብ, ንዑስ ክፍል ወይም ክፍል

በተወሰነ ጊዜ ውስጥ በድርጅታዊ አውድ ውስጥ ስልጣን ሊኖረው ይችላል; ፖለቲካ አንድን ነገር ለማሳካት ኃይልን መጠቀምን

እንዲሁም እነዚያን ተግባራት አስቀድሞ የተያዘውን ኃይል ለማስፋት ወይም ሊተገበር የሚችልበትን ስፋት ያካትታል።

ስለዚህ የፖለቲካ ባህሪ ተዘጋጅቶ መቃወም ወይም መቃወም መጀመሩ ግልጽ ነው። ተቃዋሚ ከሌለ ፖለቲካ አያስፈልግም።

በሁሉም ድርጅቶች ውስጥ ተቃዋሚዎች እና ተቃውሞዎች መከሰታቸው የማይቀር ነው, ምክንያቱም ለዝቅተኛ ሀብቶች

ከፍተኛ ውድድር ነው. በድርጅቶች የፖለቲካ አቅጣጫ ላይ ከፍተኛ ተጽዕኖ የሚያሳድሩ አምስት ዋና ዋና ምክንያቶች፡-
1. Scarcity of resources: Any person or subunit having control over the allocation of scarce resources;
their power and political influence play an important part in how these resources will be distributed
to various departments, rather than fulfilling their own needs.
2. Non-programmed decisions: Non-programmed decisions involve unique problems that cannot be
solved by structured methods and procedures. These unique problems involve many factors and
variables that are ambiguous in nature leaving room for political planning by those who have the
knowledge and techniques to successfully confront and solve such complex problems. Such non-
programmed decisions are likely to be made in the areas of strategic planning, mergers and
acquisitions and policy changes.
2. በፕሮግራም ያልተደገፉ ውሳኔዎች፡- ከፕሮግራም ውጭ የሚደረጉ ውሳኔዎች በተቀነባበሩ ዘዴዎች እና ሂደቶች

ሊፈቱ የማይችሉ ልዩ ችግሮችን ያካትታል. እነዚህ ልዩ ችግሮች በተፈጥሯቸው አሻሚ የሆኑ ብዙ ምክንያቶችን እና

ተለዋዋጭዎችን ያካትታሉ። እንደዚህ አይነት ፕሮግራም-ነክ ያልሆኑ ውሳኔዎች በስትራቴጂክ እቅድ፣ ውህደት እና

ግዢ እና የፖሊሲ ለውጦች ላይ ሊደረጉ ይችላሉ።

3. Ambiguous goals: When the goals of an organization are clearly defined and each member of the
organization is aware of these goals and is also aware of his role in contributing towards the
achievement of such goals, then there are limited grounds for political influences. However, when the
goals of a department or the entire organization are ambiguous then there is more room available for
playing politics.

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3. አሻሚ ግቦች፡- የአንድ ድርጅት ዓላማዎች በግልፅ ሲቀመጡ እና እያንዳንዱ የድርጅቱ አባል እነዚህን ግቦች ሲያውቅ እና

ለእንዲህ ዓይነቶቹ ዓላማዎች መሳካት የበኩሉን አስተዋፅኦ ሲያውቅ ለፖለቲካዊ ተፅእኖዎች ውስን ምክንያቶች ሊኖሩ

ይችላሉ። ነገር ግን፣ የአንድ ዲፓርትመንት ወይም አጠቃላይ ድርጅቱ ግቦች አሻሚ ከሆኑ ከዚያ ፖለቲካ ለመጫወት ብዙ

ቦታ አለ።

4. Technology and environment: An organization must have the ability to appropriately respond to an
external environment that is highly dynamic and generally unpredictable. The organization must
adequately adapt tocomplex technological developments that are changing day by day. Therefore, the
political behaviour in organizations is increased when the internal technology is complex and when
the external environment is highly unstable.
4. ቴክኖሎጂ እና አካባቢ፡- አንድ ድርጅት በጣም ተለዋዋጭ እና በአጠቃላይ ሊተነበይ የማይችል ውጫዊ አካባቢ ላይ

ተገቢውን ምላሽ የመስጠት ችሎታ ሊኖረው ይገባል። ድርጅቱ ከቀን ወደ ቀን እየተለወጡ ያሉትን ውስብስብ

የቴክኖሎጂ እድገቶችን በበቂ ሁኔታ ማስተካከል አለበት። ስለዚህ, በድርጅቶች ውስጥ ያለው የፖለቲካ ባህሪ

የሚጨምረው ውስጣዊ ቴክኖሎጂ ውስብስብ ከሆነ እና ውጫዊ አከባቢ በጣም ያልተረጋጋ ነው.
5. Organizational change: Whenever there are changes in the organizational structure or the
rearrangement of organizational policies, individuals in powerful positions have the opportunity to
play political games. These changes may include restructuring of a division or creation of a new
division, personnel changes and introduction of a new product line. All these changes are invitations
to political processes when various individuals and groups try to control the given situation.
5. ድርጅታዊ ለውጥ፡ በድርጅታዊ መዋቅር ወይም በድርጅታዊ ፖሊሲዎች ላይ ለውጥ በመጣ ቁጥር በስልጣን ላይ

ያሉ ግለሰቦች የፖለቲካ ጨዋታዎችን የመጫወት እድል አላቸው። እነዚህ ለውጦች ክፍልን እንደገና ማዋቀር

ወይም አዲስ ክፍል መፍጠር፣ የሰራተኞች ለውጥ እና አዲስ የምርት መስመር ማስተዋወቅን ሊያካትቱ ይችላሉ።

እነዚህ ሁሉ ለውጦች የተለያዩ ግለሰቦች እና ቡድኖች የተሰጠውን ሁኔታ ለመቆጣጠር ሲሞክሩ ለፖለቲካ ሂደቶች

ግብዣዎች ናቸው።
3. Role as a negotiator
The CEO performs the role of a negotiator in which he has the full support of an organization. A CEO
negotiates the problems that the employees face in performing the tasks in a specified period of time. If the
CEO is busy in performing some other tasks, then the role of negotiator can be delegated between the
general manager and any other departmental head. A CEO must keep some factors in mind before
performing the negotiations: If the demands of the two persons cannot be met, then the person who is

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shouting should not get what he wants. If the demand of a person who was shouting more is fulfilled then it
will lead to the belief that the demands of the person who shouts will be fulfilled. Therefore, to mitigate
these problems, a CEO must patiently hear the problems or demands of the employees and must arrive at a
situation that is acceptable by all wholeheartedly.
A CEO must negotiate the problems in such a manner that the employees of an organization agree to
increase the productivity and reduce the absenteeism.
ዋና ሥራ አስፈፃሚው የአንድ ድርጅት ሙሉ ድጋፍ ያለው የተደራዳሪነት ሚናን ያከናውናል. ዋና ሥራ አስፈፃሚ ሠራተኞቹ

በተወሰነ ጊዜ ውስጥ ተግባራቶቹን በማከናወን ላይ የሚያጋጥሟቸውን ችግሮች ይደራደራሉ። ዋና ሥራ አስፈጻሚው

ሌሎች ሥራዎችን በማከናወን ከተጠመደ፣ የተደራዳሪው ሚና በዋና ሥራ አስኪያጁ እና በማንኛውም የመምሪያ ክፍል

ኃላፊ መካከል ሊሰጥ ይችላል። አንድ ዋና ሥራ አስፈጻሚ ድርድሩን ከማከናወኑ በፊት አንዳንድ ነገሮችን ግምት ውስጥ

ማስገባት ይኖርበታል፡ የሁለቱን ሰዎች ጥያቄ መመለስ ካልተቻለ የሚጮህ ሰው የፈለገውን ማግኘት የለበትም። ብዙ ሲጮህ

የነበረው ሰው ጥያቄው ከተሟላ የጮኸው ሰው ጥያቄ ይሟላል ወደሚል እምነት ይመራል። ስለዚህ እነዚህን ችግሮች

ለማቃለል ዋና ሥራ አስፈጻሚው የሠራተኛውን ችግር ወይም ጥያቄ በትዕግስት ሰምቶ በሙሉ ልብ ተቀባይነት ያለው

ሁኔታ ላይ መድረስ አለበት።

ዋና ስራ አስፈፃሚ ችግሮቹን መደራደር ያለበት የድርጅቱ ሰራተኞች ምርታማነትን ለማሳደግ እና መቅረትን ለመቀነስ

በሚስማሙበት መንገድ ነው።

4. Role as a communicator
A CEO plays the role of a communicator in an organization. It is an important duty of a CEO to
communicate the organizational mission, vision, goals and objectives to the employees. The CEO, while
playing the role of communicator, must listen to the employee’s complaints and problems. A CEO must
understand the problem first and then respond in a positive manner to the satisfaction of the employees who
are facing the problem.
ዋና ሥራ አስፈፃሚ በድርጅት ውስጥ የግንኙነት አስተላላፊ ሚና ይጫወታል። የድርጅታዊ ተልእኮውን፣ ራዕይን፣ ግቦችን

እና አላማዎችን ለሠራተኞቹ ማስታወቅ የአንድ ዋና ሥራ አስፈፃሚ አስፈላጊ ተግባር ነው። ዋና ሥራ አስፈፃሚው

የመግባቢያ ሚና ሲጫወት የሰራተኛውን ቅሬታ እና ችግሮች ማዳመጥ አለበት. አንድ ዋና ሥራ አስፈፃሚ በመጀመሪያ

ችግሩን ተረድቶ በአዎንታዊ መልኩ ለችግሩ የተጋለጡትን ሠራተኞች እርካታ መስጠት አለበት።
5. Role as a role model
The CEO of an organization sometimes becomes a role model for the employees of the organization. The
employees try to imitate the working style of the CEO. For example, if a CEO of an organization comes late,

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then the employees will follow him and they will also start coming late. On the other hand, if a CEO is
punctual, then the employees will also be punctual. Therefore, the CEO has a great deal of influence on the
employees and he must remain perfect in his actions.
የድርጅቱ ዋና ሥራ አስፈፃሚ አንዳንድ ጊዜ ለድርጅቱ ሰራተኞች ምሳሌ ይሆናል. ሰራተኞቹ የዋና ሥራ አስፈፃሚውን

አሠራር ለመኮረጅ ይሞክራሉ. ለምሳሌ የአንድ ድርጅት ዋና ስራ አስፈፃሚ ዘግይቶ ቢመጣ ሰራተኞቹ እሱን ተከትለው

መምጣት ይጀምራሉ። በሌላ በኩል ዋና ሥራ አስፈጻሚ በሰዓቱ የሚከበር ከሆነ ሠራተኞቹም በሰዓቱ ይጠበቃሉ። ስለዚህ

ዋና ሥራ አስፈፃሚው በሠራተኞቹ ላይ ከፍተኛ ተጽዕኖ ያሳድራል እና በድርጊቶቹ ፍጹም ሆኖ መቆየት አለበት።

4.3.4. Managerial Roles in Corporate Governance
The managers of an organization also play a very important role in the success of an organization and
corporate governance. An organization must examine the roles that the managers are expected to perform.
Henry Mintzberg developed these roles in the late 1960s after a careful study of executives at work. These
managerial roles are divided into three categories. The first category of interpersonal roles arises directly
from the manager’s position and the formal authority bestowed upon him. The second category of
informational roles is played as a direct result of interpersonal roles and these two categories lead to the third
category, that of decisional roles.
በድርጅት አስተዳደር ውስጥ የአስተዳደር ሚናዎች

የአንድ ድርጅት አስተዳዳሪዎች ለድርጅት እና ለድርጅት አስተዳደር ስኬት በጣም ጠቃሚ ሚና ይጫወታሉ። አንድ ድርጅት

ሥራ አስኪያጆች እንዲሠሩ የሚጠበቅባቸውን ሚናዎች መመርመር አለበት። ሄንሪ ሚንትዝበርግ እነዚህን ሚናዎች

ያዳበረው እ.ኤ.አ. በ 1960 ዎቹ መገባደጃ ላይ በስራ ላይ ያሉ አስፈፃሚዎችን በጥንቃቄ ካጠና በኋላ ነው። እነዚህ የአስተዳደር

ሚናዎች በሦስት ምድቦች ይከፈላሉ. የመጀመሪያው የግለሰባዊ ሚናዎች ምድብ በቀጥታ ከአስተዳዳሪው ቦታ እና ከተሰጠው

መደበኛ ስልጣን ይነሳል. ሁለተኛው የመረጃ ሚናዎች ምድብ የሚጫወተው በግላዊ ሚናዎች ቀጥተኛ ውጤት ሲሆን እነዚህ

ሁለት ምድቦች ወደ ሦስተኛው ምድብ ማለትም የውሳኔ ሚናዎች ይመራሉ ።

FORMAL POSITIONAL AUTHORITY

Interpersonal roles
Figurehead
Figure 1 : various managerialLeadership
roles
Liaison

1. INTERPERSONAL ROLES
Informational role
Monitor
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Disseminator
Spokesperson
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Managers spend a considerable amount nearly 80% of their time in interacting with other people, both
within their own organizations as well as outside. These people include peers, subordinates, superiors,
suppliers, customers, government officials and community leaders. All these interactions require an
understanding of interpersonal relations. These interactions involve the following three major interpersonal
roles, which are:
a) Figurehead: Managers act as a symbolic figurehead performing social or legal obligations. These
duties include greeting visitors, signing legal documents, taking important customers to lunch,
attending a subordinate’s wedding and speaking at functions in schools and churches. All these,
primarily, are duties of a ceremonial nature but are important for the smooth functioning of an
organization.
ሀ) ስእል ራስ፡ አስተዳዳሪዎች ማህበራዊ ወይም ህጋዊ ግዴታዎችን የሚፈጽም ምሳሌያዊ አርዕስት ሆነው ይሠራሉ።

እነዚህ ተግባራት ጎብኝዎችን ሰላምታ መስጠት፣ ህጋዊ ሰነዶችን መፈረም፣ አስፈላጊ ደንበኞችን ወደ ምሳ

መውሰድ፣ የበታች ሠርግ ላይ መገኘት እና በትምህርት ቤቶች እና በአብያተ ክርስቲያናት ውስጥ ባሉ ተግባራት ላይ

መናገርን ያካትታሉ። እነዚህ ሁሉ፣ በዋነኛነት፣ የሥርዓት ተፈጥሮ ተግባራት ናቸው ነገር ግን ለድርጅቱ ለስላሳ

አሠራር አስፈላጊ ናቸው።

b) Leader: The influence of a manager is most clearly seen in his role as a leader of the unit or
organization. A manager is responsible for the activities of his subordinates, he must lead and
coordinate their activities in meeting task-related goals and he must motivate them to perform better.
He must be an exemplary leader so that his subordinates follow his directions and guidelines with
respect and dedication.
ለ) መሪ፡- የአንድ ሥራ አስኪያጅ ተጽእኖ በክፍል ወይም በድርጅት መሪነት ሚናው በግልጽ ይታያል። አንድ ሥራ

አስኪያጅ ለበታቾቹ ተግባራት ኃላፊነት አለበት ፣ ከተግባር ጋር የተያያዙ ግቦችን ለማሳካት ተግባራቸውን መምራት

እና ማስተባበር እና የተሻለ እንዲሰሩ ማነሳሳት አለበት። የበታቾቹ መመሪያውንና መመሪያውን በአክብሮትና በትጋት

እንዲከተሉ አርአያነት ያለው መሪ መሆን አለበት።

c) Liaison: In addition to their constant contact with their own subordinates, peers and superiors, the
managers must maintain a network of outside contacts in order to assess the external environment of
competition, social changes or changes in governmental rules, regulations and laws. In this role, the
managers build up their own external information system. In addition, they develop networks of
mutual obligations with other managers in the organization. They also form alliances to win support
for their proposals or decisions. The liaison with external sources of information can be developed by

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attending meetings and professional conferences, by personal phone calls, trade journals and by
informal personal contacts within outside agencies.

ሐ) ግንኙነት፡- ሥራ አስኪያጆች ከራሳቸው የበታች፣ እኩዮቻቸውና አለቆቻቸው ጋር በየጊዜው ከሚያደርጉት

ግንኙነት በተጨማሪ የውድድርን ውጫዊ ሁኔታ፣ የማኅበራዊ ለውጦችን ወይም የመንግሥትን ሕጎች፣ ደንቦችንና

ሕጎችን ለውጦችን ለመገምገም የሥራ አስኪያጆች የውጭ ግንኙነቶችን መረብ መጠበቅ አለባቸው። በዚህ ሚና

ውስጥ አስተዳዳሪዎች የራሳቸውን የውጭ መረጃ ስርዓት ይገነባሉ. በተጨማሪም, በድርጅቱ ውስጥ ካሉ ሌሎች

አስተዳዳሪዎች ጋር የጋራ ግዴታዎች መረቦችን ያዘጋጃሉ. እንዲሁም ለውሳኔዎቻቸው ወይም ለውሳኔዎቻቸው

ድጋፍ ለማግኘት ጥምረት ይመሰርታሉ። ከውጪ የመረጃ ምንጮች ጋር ያለው ግንኙነት በስብሰባዎች እና ሙያዊ

ኮንፈረንስ፣ በግል የስልክ ጥሪዎች፣ በንግድ መጽሔቶች እና በውጭ ኤጀንሲዎች ውስጥ መደበኛ ባልሆኑ የግል

ግንኙነቶች ሊዳብር ይችላል።

2. INFORMATIONAL ROLES
By virtue of his interpersonal contacts, a manager emerges as a source of information on a variety of issues
concerning the organization. In this capacity of information processing, a manager executes the following
three roles:
I. Monitor: Managers are constantly monitor and scan their environment, internal and external, collect
and study information regarding their organization and the outside environment affecting their
organization. This can be done by reading reports and periodicals, by asking their liaison contacts
and through gossip and speculation.
II. Disseminator of information: Managers must transmit the information regarding changes in
policies or other matters to their subordinates, their peers and to other members of the organization.
This can be done through memorandums, phone calls, individual meetings and group meetings.
III. Spokesperson: A manager has to be a spokesman for his unit and he represents his unit in either
sending relevant information to people outside his unit or making some demands on behalf of his unit.
This may be in the form of the president of the company making a speech to a lobby on behalf of an
organizational cause or an engineer suggesting a product modification to a supplier.
3. DECISIONAL ROLES
On the basis of the environmental information received, a manager must make decisions and solve
organizational problems. In that respect, a manager plays 3 important roles, which are:

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1. Entrepreneur: As entrepreneurs, managers are continuously involved in improving their units and
facing dynamic technological challenges. They are constantly on the lookout for new ideas for
product improvement or products addition. They initiate feasibility studies, arrange for capital for new
products if necessary and ask for suggestions from the employees for ways to improve the
organization. This can be achieved through suggestion boxes, holding strategy meetings with project
managers and research and development personnel.
2. Conflict handler: Managers are constantly involved as arbitrators in solving differences among the
subordinates or the employee’s conflicts with the central management. These conflicts may arise
due to demands for higher pay or other benefits or these conflicts may involve outside forces such as
vendors increasing their prices, a major customer going bankrupt or unwanted visits by governmental
inspectors. Managers must anticipate such problems and take preventive action if possible or take
corrective action once the problems have arisen. These problems may also involve labour disputes,
customer complaints, employee grievances, machine breakdowns, cash flow shortages and
interpersonal conflicts.
3. Resource allocator: The third decisional role of a manager is that of a resource allocator. Managers
must establish priorities among various projects or programs and make budgetary allocations to the
different activities of the organization based upon these priorities. They assign personnel to jobs,
allocate their own time to different activities and allocate funds for new equipment, advertising and
pay raises.

All these roles are important in a manager’s job and are interrelated even through some roles may be more
influential than others, depending upon the managerial position. For example, sales managers may give more
importance to interpersonal roles, while the production managers may give more importance to decisional
roles. However, managerial effectiveness is determined by how well the decisional roles are performed by the
manager in the organization.

AUDIT COMMITTEE
An audit committee is a type of committee introduced by corporate governance. This committee is responsible
for handling a company’s financial reporting and disclosure process. It also entails managing the
company’s internal controls that overlook this process. In some cases, the audit committee may also be
responsible for managing a company’s risks

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An audit committee is a committee of an organization’s board of directors which is responsible for oversight
of the financial reporting process, selection of the independent auditor, and receipt of audit results both
internal and external. 
The primary purpose of a company's audit committee is to provide oversight of the financial reporting
process, the audit process, the company's system of internal controls and compliance with laws and
regulations.
Roles and Responsibilities of an Audit Committee
 The audit committee assesses the analysis of important issues and judgments made by management in
the financial reports.
 The audit committee ensures that appropriate policies and processes are in place for the prevention and
identification of fraud, such as asset misappropriation, corruption, and financial statement fraud.
 The audit committee works with management to make sure that necessary steps are taken on the
detection of fraud .
 The audit committee should understand the responsibilities of management regarding laws governing
anti-corruption and determine whether appropriate policies and controls are in place for the detection
and mitigation of risks related to corruption.
 The audit committee meets with management and the independent auditor to discuss the quarterly and
audited annual financial statements of the company. They also review the news releases on earnings,
along with the financial details and recommendations given to external rating agencies and analysts.
 The audit committee should not be overburdened with the responsibility of risk oversights. They are
only responsible for discussing and reviewing the related policies. The audit committee in some
organizations may also be given the responsibility of cyber risk oversight.
 The audit committee appoints, oversees, and compensates the independent auditor.

INTERNAL AUDIT
Internal audit provides assurance by assessing and reporting on the effectiveness of governance, risk
management, and control processes designed to help the organization achieve strategic, operational, financial,
and compliance objectives
Internal auditors will examine issues related to company business practices and risks, while external auditors
examine the financial records and issue an opinion regarding the financial statements of the company. Internal
audits are conducted throughout the year, while external auditors conduct a single annual audit
INTERNAL CONTROLS

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Internal control refers to procedures or practices within an organization to ensure that the organization
achieves the targets set in the strategy, uses resources economically and that the information in support
of management decisions is reliable.
Internal control is a process, effected by an entity's board of directors, management and other personnel,
designed to provide reasonable assurance: That information is reliable, accurate and timely.
Internal controls are policies, procedures, and technical safeguards that protect an organization's assets by
preventing errors and inappropriate actions. Internal controls fall into three broad categories: detective,
preventative, and corrective
Preventive Internal Controls
Preventive internal controls are put in place to, as the name implies, prevent an adverse event from occurring.
For example, many applications have built-in checks and balances to avoid entering incorrect information.
Preventive controls are the best kind of controls because they lessen the need to detect mistakes after the fact.
Automated preventative controls are even better because they remove the need for human intervention and
streamline auditing.
W Detective Internal Controls
Detective internal controls detect an error problem after it has occurred. Ideally, detective internal controls
will discover an issue before it becomes a significant problem.
Corrective Internal Controls
Corrective internal controls are implemented after the internal detective controls discover a problem. These
controls could include disciplinary action, report filing, software patches or modifications, and new policies.
They are usually put into place after a root cause investigation.

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