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The Board Room
Board of Directors are basically the governing and regulatory body that lays down rules, regulations , bye laws, strictures for proper governance of any organization. Now when we refer to any organization we talk about those set up that meet the criterias laid down to be referred as a private limited company . For instance the necessary paid up capital, the required number of directors, number of members, adherence to regulations , filing of necessary documents and papers on time and so on and so forth. Coming back to board members who are referred to as Board Of Directors in more professional and astute terms. Even public and Private Limited companies of any country whether it is governed by Securities And Exchange law (SEC) as is prevalent in USA or Companies Act 1956 as is followed out here in India – has to have certain number of directors. Companies Act , 1956 is very precise and vivid when it comes to appointment and removal of directors and infact it gives opportunities to members or partners of any company to act as part time directors by filling in the position of alternate directors that arises when original director is away. This happens under section 313 of the companies Act , 1956. Casual vacancy that gives another scope for appointment to members to be a part of board wherein Board has the authority to appoint such members. Board Of directors can fill the casual vacancy only if director is appointed in General Meeting. Moreover , there is this concept of appointing executive and Non executive directors who can be a part of Board Of directors. Non Executive Directors are whole time directors who are eligible for sitting fees for attending any Board Meeting – their sitting fees though varies subject to regulations and approval of the Central Government. While whole time Company Secretary can be appointed as part time director though substantial power of management cannot be vested in him. In several countries like USA , UK independent directors are appointed who are neither executive nor executive director and who are appointed as per the guidelines of company law prevalent out there. The most remarkable thing that is noticed in the formational structure of Bard Members is that they can be either Unitary or Dual in nature , under unitary system , the Board consists of both executive and non executive directors while the day to day affairs of the business is the look out of the CEO and the same is delegated and divided amongst the Board members and executive committee. This is prevalent in United States and United Kingdom as well as few commonwealth countries. On the contrary under Dual System the supervisory and managerial activity is taken care off by separate bodies of Board of Directors. Responsibilities Board Of Directors in any country is responsible for managing the daily affairs of the business , being answerable and accountable to CEO, shareholders , stakeholders of the organization. The Board and shareholders are considered interlinked and interconnected with each other . The Board Members are the one who are the source of all necessary informations and datas to the shareholders – who are also a part of the business. The amount of profit and revenue generated as well as the portion of Revenue set aside for shareholders & stake holders should be part of the Annual Report. Moreover, every new development within the business that affects and impacts shareholders interest needs to be addressed too. This can be done by regular disclosure. There are situations when the amount of Revenue generated is inadequate and hence shareholders often miss out their share of revenue which needs to be put across to them . Yes , there are certain informations and statistics that is considered highly confidential and that are strictly a part of non disclosure item of which people sitting in the higher level of hierarchy are supposed to know. Meetings and associations are part of the function of the Board- Board Meetings often decide the appointment and Removal of Directors , members and shareholders. Various Resolutions needs to be passed which needs the sanction and authorization of the Board members. Chairman plays a very crucial role in ensuring proper conduct of ant Board or General meeting . Chairman is often appointed from amongst the Board after anonymous selection and voting. He is considered as the presiding officer who takes care off Resolutions , ensuring that all items in the agenda is basically discussed and brought up to the Board members , minutes are recorded and duly signed.
Tanveer Mohammad Masood
company Secretary( professional)