Corporate Boards and Decentness

University:
California State University, Northridge
Course:
BLAW 370 | Corporate Social Responsibility
Academic year:

2024
Views:

385

Pages:

4
Author:

customer-10020279

3) Corporate boards and decentness Definition Board: a group of individuals that are elected as, οι elected to at as, represens. atives of the des stockholders to estab. lish corporate management related policies and to make decision. major company issues. on Two functions: Monitoring Role Advisory Role * Outside Duertas: - A non-excutive director ce outside discilor is member of the board of a directors of a company who does not the excutive management form part of team. Inside directors who also serve are meenubers of the board previously seeved enccntine managers of the company. Inside directors & Outride diverten Al directore Independent duectors 4 + Gray directors Outside duelon fion * Gray diveclan; those ppl who are outside but not independent me called gray diverleis * what else grices outside diveclen to work attention, and encriss judgement hand, pay independent of management? Laloul marhet. market att for the outside direitou. If you want to find someone, you're going to find them in the market. So there are some consultancy company Theid company that sposa specialises in recommending outside diveclare to the listed forms. For en: If you l'are serving a company outside discuter especially. as an a lage company that help you demtop your shills, acquire network and signal to the market, you build your reputation based to this on this. In addition some dicitou get contient' from the CEO and in retus ash froe personal consultancy Certain things. on Moreover, there is another incentive legal liability is an important fartar in leading entoide dirciters to do a good job. * Reputational meentini - / for outside diverter) Outside directors have incentives to develop reputations decision contiol as experts in and use their directorships to signal to enternal and entunal machets for decision agents that They ane experte. The signals credible when the direct payments to outside directen are small but there is 1 substantial devalua-tion to of human capital when internal decision control breaks down. Yermack, D. (2004) show that outside diventars who develop reputations مه shillful monitors might acquire additional directorship is other firms. Other in centie Some outside directers may obstain special benefits from their service, such as per-sonal consulting contrails with the corporation a a Stream of business for Their mais employers sig is. Others may enter into interlocheing relationship with the LED, obtaining mutual benefits by sitting.. another's boards on one D sitting together on a Third board.