CH2 MLR465 - SUMMER 2011 2-2 Corporation a mechanism...

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Unformatted text preview: SUMMER 2011 2-2 Corporation : a mechanism established to allow different parties to contribute capital, expertise and labor for their mutual benefit Corporation is governed by the board of directors that oversees top management with the concurrence of the shareholders. 2-3 Corporate governance: the relationship among the board of directors, top management and shareholders in determining the direction and performance of the corporation 2-4 Due care : Board of directors are responsible that the corporation is not harmed by members of the board. Directors can be held liable 2-5 Responsibilities of the Board of Directors • Sets corporate strategy, overall direction, mission, or vision • Hires and fires the CEO and top management • Controls, monitors, or supervises top management • Reviews and approves the use of resources • Cares for shareholders’ interests • Assures that the corporation is managed in accordance with state laws, security regulations and conflict of interest situations 2-6 Role of the Board in Strategic Management • Monitor developments inside and outside the corporation • Evaluate and Influence management proposals, decisions and actions • Initiate and Determine the corporation’s mission and strategies 2-7 2-8 Members of a Board of Directors Inside Directors are officers or executives employed by the board’s corporation Outside Directors are executives of other firms but are not employees of the board’s corporation 2-9 Members of a Board of Directors Affiliated directors- not employed by the corporation, handle legal or insurance work Retired executive directors- used to work for the corporation, partly responsible for past decisions affecting current strategy Family directors- descendents of the founder and own significant blocks of stock 2-10 Board of Directors Codetermination – The inclusion of a corporation’s employees on its board of directors 2-11...
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This document was uploaded on 04/05/2012.

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CH2 MLR465 - SUMMER 2011 2-2 Corporation a mechanism...

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