The role of Board of Directors, Managing Director and the Company Secretary

The Board of Directors of a company is a collective body of persons appointed as the top decision-making entity for the corporation. The board is often made up of top managers who are employees (Executive directors) and those who represent shareholders and do not work in the company (Non-executive directors) who must be independent to ensure the interest of those they represent are protected.

The board performs several functions which include the following

Functions of the Board of Directors

The Board of Directors of a company is responsible for setting up the policies, overall direction of the company. This means coming out with strategic decisions, policies on how the business should be carried out, the functions of managers, remuneration of managers, strategic goals for the manager and his or her staff among others.

Again, the board is to observe best practices in corporate governance. To achieve this, it must form relevant committees such as the advisory committee, finance committee, audit committee among others, and assign board members responsibilities to oversee the performance of the functions of the committees towards achieving the overall objective of compliance and goals.

One key employee of the company is the managing director, the board is responsible for hiring the manager. They also, monitor the performance of the managing director in line with decisions taken at the board meetings and may evaluate his performance and fire the managing director for none performance.

Furthermore, the board is responsible for determining the dividend policy of the company every year. The dividend policy spells out the percentage of profit that must be paid to shareholders and the portion to be reserved for investment into operations of the company. This key decision is taken with the future plans of the company in mind and the needed funding for projects.

The roles of the Managing Director in a company are important to the success of the business. According to the Institute of Directors (IoD) (Institute of Directors, 2018) this includes

1. Directing and controlling the operations of the company; requires the manager to guide business unit managers and functional heads, team up to deliver value for the company so as to achieve the mission and objectives as set by the board.
2. He also ensures the needed staff are recruited and retained, well-motivated, trained, and resourced to deliver on the job.
3. With the help of business unit and departmental heads, the managing director must come out with corporate business plans, ensure they are implemented and monitored. The Cost-effectiveness of these plans is as important as achieving the set targets before the end of the year.
4. The manager is responsible for updating the board members on happenings in the company, the industry, and others. This will help the board take the needed steps to meet statutory regulations, take proactive steps to ensure the business does not lose.
5. The manager is responsible for establishing formal and informal links with key customers, suppliers, and government agencies. This helps in the transfer of useful information to and from them to the company. This also ensures that feedback received leads to improved decisions and plans for the good of the company.
6. Also, the manager oversees the preparation of annual budgets and target setting in the company for staff at all levels. These budgets are then presented to the board by the manager who defends or explains them to the board; proposes its acceptance for implementation.

The roles of the Company Secretary are important to the survival of the company.

The company secretary is a senior managerial post in a public or private company that is not clerical but one that is exercised by a person with a legal or corporate governance background.

He or she ensures that the organization complies with relevant legislation and regulations that govern the operations of the business and keeps all board members updated on the responsibilities placed on them by the law. Examples of these legal requirements are filing annual returns at the registrar of companies.

Any illegal actions of the company will affect board members hence the company secretary functions as the legal representative of the company. He or she must file any changes in the director’s failure of which can lead to civil penalties. This ensures that the managing director, staff, and board members operate within the law and are informed of any new changes.

READ: 10 steps to organizing a business conference and succeeding in 2021-2022

From the above, the board of directors, managing director, and company secretary are integral parts of every company whose functions must all be directed toward ensuring compliance, productivity, accountability, and achievement of company-wide objectives.

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