Book contents
- Frontmatter
- Contents
- Contributors
- Table of cases
- Table of statutes
- Preface
- Preface to the first edition
- PART ONE BASIC CONCEPTS, BOARD STRUCTURES AND COMPANY OFFICERS
- 1 The concept ‘corporate governance’ and ‘essential’ principles of corporate governance
- 2 Stakeholders in corporate governance and corporate social responsibility
- 3 Board functions and structures
- 4 Types of company directors and officers
- PART TWO CORPORATE GOVERNANCE IN AUSTRALIA
- PART THREE CORPORATE GOVERNANCE IN INTERNATIONAL AND GLOBAL CONTEXTS
- PART FOUR BUSINESS ETHICS AND FUTURE DIRECTION
- Index
3 - Board functions and structures
from PART ONE - BASIC CONCEPTS, BOARD STRUCTURES AND COMPANY OFFICERS
Published online by Cambridge University Press: 05 June 2012
- Frontmatter
- Contents
- Contributors
- Table of cases
- Table of statutes
- Preface
- Preface to the first edition
- PART ONE BASIC CONCEPTS, BOARD STRUCTURES AND COMPANY OFFICERS
- 1 The concept ‘corporate governance’ and ‘essential’ principles of corporate governance
- 2 Stakeholders in corporate governance and corporate social responsibility
- 3 Board functions and structures
- 4 Types of company directors and officers
- PART TWO CORPORATE GOVERNANCE IN AUSTRALIA
- PART THREE CORPORATE GOVERNANCE IN INTERNATIONAL AND GLOBAL CONTEXTS
- PART FOUR BUSINESS ETHICS AND FUTURE DIRECTION
- Index
Summary
There is now overwhelming evidence that the board system is falling well short of adequately performing its assigned duties. Without fundamental improvement by individual boards, the entire board system will continue to be attacked as impotent and irrelevant and the boards of troubled and failing companies will, with good reason, increasingly become the targets of not only aggrieved and angry shareholders but also employees, creditors, suppliers, governments, and the public.
David SR Leighton and Donald H Thain, Making Boards Work (1997) 3.Until they served on a board, people may well imagine that directors behave rationally, that board level discussions are analytical, and that decisions are reached after careful consideration of alternatives. Not often. Experience of board meetings, or of the activities of any governing body for that matter, shows that reality can be quite different. Directors' behaviour is influenced by interpersonal relationships, by perceptions of position and prestige, and by the process of power. Board and committee meetings involve a political process.
Bob Tricker, Corporate Governance: Principles, Policies and Practices (2008) 241.Higher community expectation of directors
Initially low standards of care, skill and diligence expected of directors
Directors' statutory duties and liability are discussed in greater detail in Chapter 10. It is, however, important first to make a few observations regarding the higher community expectations of directors.
Based on English precedents, it has been accepted that directors are not liable for a breach in their duty of care, skill and diligence if they merely acted negligently.
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- Information
- Principles of Contemporary Corporate Governance , pp. 71 - 100Publisher: Cambridge University PressPrint publication year: 2010