What is Brand Promise? – Mistakes to Avoid While Building it
Brand evokes the responses. There are many people who love their Apple iPod or love their car etc. There are certain feelings that come to your mind when you think about your favorite brands. People expect that these brands should demonstrate brand promises every time whenever they are, encountered. Inconsistencies in the performance of services […]
Sources of Data
Sources of Primary Data The sources of generating primary data are: Observation Method Survey Method Experimental Method Experimental Method There are number of experimental designs that are used in carrying out and experiment. However, Market researchers have used 4 experimental designs most frequently. These are – CRD – Completely Randomized Design RBD – Randomized Block […]
Consultative Selling: Pre-Sales Preparation
Selling is an Art. Not everyone can shine well as a Salesman. But for those who do train and groom themselves as salesmen, the career can be a rewarding as well as challenging experience. Selling in current times is definitely a challenge, especially when the competition is very high and the customers are very choosy, […]
Integrated Marketing Communications – Meaning and its Components
It is essential for organizations to promote their brands well among the end-users not only to outshine competitors but also survive in the long run. Brand promotion increases awareness of products and services and eventually increases their sales, yielding high profits and revenue for the organization. To understand integrated marketing communication, let us first understand […]
What is Influencer Marketing and Why it is so Important for Marketers in the Digital Age
As Social Media Grows in Importance, Marketers are Turning to Influencer Marketing We live in times when social media is all pervasive and all important not only for individuals, but also for business entities. Indeed, no business can afford not to have a presence on social media which translates into mandatorily having a Facebook and […]
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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