Question

In: Finance

once a person accepts their appointment as a director on a board, they have a fiduciary...

once a person accepts their appointment as a director on a board, they have a fiduciary duty. List four aspects of their fiduciary duty and discuss the meaning and implication of each. You may also use practical examples what it entails.

Solutions

Expert Solution

Corporate Governance is very vital factor for any company to have healthy operational and financial status and growth. This in simple words, means a set of rules, procedures, policies or framework advocated in the company and are used in each and every aspect of the operations of the company. This brings up discipline within the organisation and helps in controlling any unethical practices etc.

The Board of Directors have to keep up certain practices to hold the Corporate Governance as utmost priority in every aspect of running the company effieciently.

Two vital features which any member of the Board should possess are they should be knowledgeable and straightforward and ethical in nature.

The Board is generally considered as the knowledge house with lots of business ideas churning to give the best results oriented ideas to the next level Management to implement for the benefit of the company. Apart from the routine operations / business of the company, the Board is looked upon for the strategic ideas for the company either to uplift from the turbulent situations or to expand its business / value creation for the business. Hence, the members of the Board are expected to be knowledgeable in multiple ways to best argue of the plans and result in the best decision making.

Being straight forward and being ethical are utmost important nature of the members of the Board. The Board is considered as the representative body on behalf of the shareholders. Hence, at all times, the Board is required to maintain the standards of highest ethics to keep the trust of shareholders. Any unethical practices or tranasctions with conflicting interest are required to be higlighted and questioned immediately. There should not be any room for any sort of unethical transactions.

Apart from the above, the below other factors are as well of high importance:

The directors should practise utmost caution incase of any transactions with any conflict of interest. In case of any related party transactions or other transactions with direct or indirect influence, the same need to be tabled before the Board of Directors and are required to be critically examined before execution of such transactions.

Also, being a director on the Board, as one can observe, they have extensive rights on the operations of the compnay; However, the director should be cautious and diligent interms of their involvement and its extent in the operations or decision making of the company activities.


Related Solutions

Once a person accepts their appointment as a director on a board, they have a fiduciary...
Once a person accepts their appointment as a director on a board, they have a fiduciary duty. List four aspects of their fiduciary duty and discuss the meaning and implication of each. You may also use practical examples to explain what it entails. (12)
Q1) Discuss the Dispute Adjudication Board (DAB), the Appointment of the Dispute Board, and the Failure...
Q1) Discuss the Dispute Adjudication Board (DAB), the Appointment of the Dispute Board, and the Failure to Agree on the Composition of the Dispute Board, Obtaining Dispute Board’s Decision in the FIDIC 1999
We have to assume that once a person got a job they would receive that wage...
We have to assume that once a person got a job they would receive that wage forever. Of course that is not the case. People typically retire around age 65. For this question compare unemployed workers that are 20 - 30 years old to unemployed workers that are 55 - 65. How would these workers asking wage, unemployment rates and expected duration of unemployment compare? 1. 55 - 65 age group have an asking wage that is: A. Higher than...
// File name: Person.h // Person class declaration. Person is the base class. #pragma once #include...
// File name: Person.h // Person class declaration. Person is the base class. #pragma once #include <iostream> using namespace std; class Person { private:         string fName;         string lName;         int birthYear;         int birthMonth;         int birthDay; public:         Person();         void setName(string, string);         void setBirthDate(int, int, int);         string getFullName();         string getBirthDate(); }; // File name: Person.cpp // Person class definition. Person is the base class. #include "Person.h" Person::Person() { fName = ""; lName =...
Steve, the Managing Director of Landscape Leaders Pty Ltd (“Landscape”) accepts a bulk order for landscaping...
Steve, the Managing Director of Landscape Leaders Pty Ltd (“Landscape”) accepts a bulk order for landscaping materials from Gotcha Gardens Pty Ltd (“Gotcha”). The landscaping materials are delivered to Gotcha, who fail to pay for the materials. Gotcha had a history of failing to pay their invoices on time and a bad credit score and Steve was aware of this. Due to increasing financial difficulties, Gotcha goes into liquidation, without ever paying Landscape for the materials. Meanwhile, Steve had also...
As the discharge port agent you are approached by a person claiming to be a director...
As the discharge port agent you are approached by a person claiming to be a director of the ‘notify party’ shown on the bill of lading for one of the consignments. According to the manifest the Bill of Lading (B/L) is made out “to order”. He states that he does not have the original B/L and you tell him that the only way he will get that consignment is if he presents a letter of indemnity countersigned by a bank....
What are the overall fiduciary responsibilities corporations have to the Sarbanes Oxley Act?
What are the overall fiduciary responsibilities corporations have to the Sarbanes Oxley Act?
Mandy is a minority shareholder and director of Happy Faces Childcare Pty Ltd. At a board...
Mandy is a minority shareholder and director of Happy Faces Childcare Pty Ltd. At a board meeting of the company, Mandy is shocked to learn that one of the directors, Arnold, had personally benefited from the sale of some of the company's assets at an undervalue. Despite objections from Mandy, a majority of the Board voted to ratify the transaction. Amold is a wealthy businessman. Required: Advise Mandy whether she would be able to pursue either a statutory derivative action...
create class diagram of the following case. Case: Once a month, the person in charge of...
create class diagram of the following case. Case: Once a month, the person in charge of the human resources area of ​​the organization prepares the payroll to be paid. Once the calculation is made, the manager accesses and authorizes the payment of the information generated for payment, which is updated in the database to be sent to the Bank. The person in charge of the payroll, in turn, is in charge of making the entry and / or withdrawal of...
is there any problem for a person being a director of his own sole trading company...
is there any problem for a person being a director of his own sole trading company considering the fact that he is a foreigner in Australia?
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT