Role of the Board from Legal and Regulatory Perspectives August 15, 2022 postadmin Post in Uncategorized Executive Leadership and Governance Role of the Board from Legal and Regulatory Perspectives Agenda Review of Prepare Activities Stakeholders and Validity of Stakeholder Theory Board Structures and Representation Review of Apply Activities Critical Analysis of Boardroom Behaviour Reflection Topic Learning Outcomes Explain and evaluate the purpose and function of a board of directors Explain the purpose of different elements of a board report Critically evaluate board structures and performance Prepare “The directors of such companies, however, being the managers rather of other people’s money than of their own, it cannot well be expected that they should watch over it with the same anxious vigilance with which the partners in a private copartnery frequently watch over their own.” – Adam Smith, Wealth of Nations (1776, p.408) The Role of a Board Source: King IV Report for Corporate Governance, Institute of Directors Southern Africa (2016) Agency Theory and Post Agency Ideas Source: Slyke, 2006, as cited by Snippert et al (2015) Information Asymmetry in real life Source: Slyke, 2006, as cited by Snippert et al (2015) Source: Johnson et al (2017), adapted from Freeman (1984) Source: Rajablu et al (2014 ) Source: Johnson et all (2017), adapted from Mendelow, (1991) Essential Reading • Ambrose Business Solutions, 2013. Ten Reasons Boards Fail. [online] Available at: • IAS Plus, 2020. Sustainability Reporting. [online] Available at: https://www.iasplus.com/engb/resources/sustainability-reporting/sustainability-reporting • Inside America’s Boardrooms, 2019. How Should Corporate Boards Evaluate Their Effectiveness? [online] Available at: https://youtu.be/gFYxqNvUc4c • Kakabadse A., Kakabadse N.K, Moore, P., Morais, F, Goyal, R. 2017. Conflict and Tension in the Boardroom. How Managing Disagreement Improves Board Dynamics. Published: ICSA, The Governance Institute, [online] Available at: https://www.icsa.org.uk/knowledge/research/the-conflict-and-tension-in-the-boardroomreport • Kauffman FoundersSchool, 2015. Startup Boards: Board Functions and Responsibilities. [online] Available at: https://youtu.be/0UB2Y86N7Vw • Tan, C, 2011. The One-Tier and Two-Tier Board Structures and Hybrids in Asia – Convergence and What Really Matters for Corporate Governance. [online] Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2140345 Stakeholders and Validity of Stakeholder Theory 20 minutes • Download the activity worksheet and review the questions and prompts • Discuss your answers as a group using the chat box and give your answers to the polls • We will debrief after this where we review the discussion and poll answers together as a group Board Structures Source: Tricker (1994 ) as cited DuPlessis (2009) Close Company Close Company Majority Outsider Two Tier Board Structures and Representation 20 minute – group discussion • Download activity worksheet and review questions and prompts Apply Apply The Board of a company has to make strategic decisions about the direction of the company, for example whether to launch a new product, whether to enter a new market etc. What sources of information should the board use in order to make well-informed decisions? Source: Governance Today, 2020 Critical Analysis of Boardroom Behaviour 30 minutes • Read the instructions in the activity worksheet then discuss your thoughts as a group • Nominate one group member to act as your scribe, who will capture your thoughts using the notes pod • Your output in this pod will feed through to the main room and we will discuss this after your group work is complete Reflective Practice 1. What learning will you take away from this webinar? • Was anything new to you or came as a surprise? • Is there anything that you will now think about differently? • What have you found particularly useful? 2. How might you develop you approach to leadership as a result of these reflections? • Where do you see these concepts reflected in your own leadership practice? • Do you have strengths/weaknesses in these areas? • What concrete things that you can do over the next week or two to improve your practice? • What things can you do in the longer term to improve your practice? • Where do these things fit in your personal development plan? Recap • Review of Prepare Activities • Stakeholders and Validity of Stakeholder Theory • Board Structures and Representation • Review of Apply Activities • Critical Analysis of Boardroom Behaviour • Reflection Any questions or comments? Thank you for your participation Next Steps – Consolidate • Topic roundup • Topic quiz References • Ambrose Business Solutions, 2013. Ten Reasons Boards Fail. [online] Available at: • IAS Plus, 2020. Sustainability Reporting. [online] Available at: https://www.iasplus.com/engb/resources/sustainability-reporting/sustainability-reporting • Inside America’s Boardrooms, 2019. How Should Corporate Boards Evaluate Their Effectiveness? [online] Available at: https://youtu.be/gFYxqNvUc4c • Johnson, G. Whittington, R., Regner, P., Scholes, K., Angwin, D., 2017. Exploring Strategy, Eleventh Edition Pearson Education UK. [Online] Accessed at: https://ebookcentral.proquest.com/lib/bpp/reader.action?docID=5185938&ppg=166 • Kakabadse A., Kakabadse N.K, Moore, P., Morais, F, Goyal, R. 2017. Conflict and Tension in the Boardroom. How Managing Disagreement Improves Board Dynamics. Published: ICSA, The Governance Institute, [online] Available at: https://www.icsa.org.uk/knowledge/research/the-conflict-and-tension-in-the-boardroomreport References • Kauffman FoundersSchool, 2015. Startup Boards: Board Functions and Responsibilities. [online] Available at: https://youtu.be/0UB2Y86N7Vw • Tan, C, 2011. The One-Tier and Two-Tier Board Structures and Hybrids in Asia – Convergence and What Really Matters for Corporate Governance. [online] Available at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2140345 • Rajablu, M., Marthandan, G., Yusoff, W. F. W., 2014. Asian Social Science; Vol. 11, No. 3; 2015 Managing for Stakeholders: The Role of Stakeholder-Based Management in Project Success. Recommend a specific page subset. [online] Available at: Click to access fd6d56b3e46de5c3f608cd87122c044b87b8.pdf • Smith, A. 2002. The Wealth of Nations. [Online] Available from: https://lccn.loc.gov/2002564559.