||The Board of Directors
||Any company should have a forum for its governance. In most cases this would be a Board of Directors.
||The Board’s mission
||1. The mission of the Board of Directors is to protect the equity and to add value to the company and to maximize the return on the investment of the owners.2. These matters should be discussed, reviewed and approved in meetings of the Board of Directors.
||1. The responsibilities of the Board of Directors are established in the Company law. These involve defining strategies, electing and removing the CEO supervising management and naming and removing Independent auditors.2. The Board of Directors should approve the company’s Code of ethics.
||1. Different committees, each made up of a few members of the board, must be set up. For example nomination committees, audit committees, remuneration committees, etc.2. Only a full Board can make decisions3. Each company must set up at least an audit committee
||Boards of Directors should be as small as possible and may vary in size between 5 and 9 members, according to the needs of the company.
||Internal and externalboard members
||There are three kinds of board members:- independent- external- internal
||In order to do evaluate CEO and top management without Constraints, the independent and external board members should meet regularly in the absence of these people.
||Invitations to attend meetings
||The CEO should be invited to attend the whole meeting with the exception of the executive session.
||Evaluation of the Board and the individual Directors
||A formal evaluation of the Board and each of the boar Members should be made every year.
||Board member qualifications
||The following experiences and knowledge should be present among the board members:- experience of good boards, i.e., known for their excellence- experience as Chief Executive Officer- experience of crisis management- Knowledge of finance & accounting of the company’s business
– knowledge of local and international markets
– connections of interest to the company
||Term of office
||It should be short, preferably just one year long. Reelection should be possible only after a formal evaluation of performance
||If the term is short and the evaluation method efficient, no age limit is necessary.
||Change in a board member’s main occupation
||A board member’s main occupation is an important factor in choosing him/her. When his/her main occupation changes, the board member should tender his/her resignation.
||The level of fees, on an hourly basis, should be compatible with the remuneration of the CEO including his bonus and fringe benefits.
||Board members should be entitled to consult with external professionals (lawyers, auditors, tax specialists etc.) paid by the company to get a second opinion.
||Independent board member
||The definition of independence is:- Not having any ties with the company, except possible shareholdings- Not having been an employee of the company or any of its subsidiaries- Not providing any service or product to the company- Not being an employee of any company providing any service or product to the company
– Not being married or related down to the second degree to any company director or manager
– Not being paid anything by the company except normal board member fees.
A board member should seek maximum independence from the owner or stakeholder that may have nominated him/her, knowing that, once elected his/her responsibility should be to all owners.
||The Chairman of the Board of Directors
||The Chairman is responsible for the performance of the Board of Directors, for establishing its objectives and programs and for chairing its meetings.
||Chairman of the Board and CEO
||The Chairman of the Board and the Chief Executive Officer should be two separate people.
||Independent board Leadership (Lead Director)
||If the Chairman of the Board and the CEO are the same person, it is important that the Board have a particularly influential member, someone who is highly regarded by his/her fellow executives and the business community in general.
||The Board of Directors should name one person as the company’s spokesman, eliminating the risk of disagreement between statements by the Chairman, the CEO and others.
||Evaluation of the CEO
||Once a year, the Board of Directors should make a formal evaluation of the CEO’s performance.
||The Board of Directors should always have an updated succession plan for the CEO and all other key persons in the company.
||New board member introduction
||A new board member should be given an introduction program. The new board member should be introduced to his/her fellow board members, the CEO, top management and other key Personnel. The new board member should also visit manufacturing facilities and other places of business.
||Documentation for the board meetings
||All documentation must be in the Board Members’ hands before the weekend prior to the meeting. Board Members must have read everything and be prepared for the meeting.
||The agenda of the board meeting should be prepared by the Chairman of the Board, based on suggestions from Board Members and discussions with the CEO.
||Minutes of the board meetings
||Minutes should be clearly worded and should record decision made. Any board member may request that dissident opinion be recorded be submitted to formal approval by the Board of Directors.
||Relations with the owners
||The Board of Directors is elected by the owners whom it represents and to whom it is accountable for the performance and the actions of the company.
||Relations with the CEO and the top management
||1. The Board of Directors elects and removes the CEO and establishes his/her remuneration.2. The Board of Directors should pay a special attention to the manner the CEO and top managers are handling relations between the company and its stakeholders and should not interfere with the management in operational matters.
||Relations with the Independent Auditors
||1. The Board of Directors, representing the owners, selects and removes the Independent Auditors.2. It should approve the audit plan and negotiate the fees.
||Relations with the Fiscal Council*
||The owners elect the Fiscal Council. The role and the responsibilities of the Fiscal Council are set forth by the Company Law.