The Duties and Responsibilities of the Non-Executive Directors in the Corporate Governance Process Free Essay Example, 750 words

In order to promote ideal corporate governance, UK regulatory bodies instituted structures and mechanisms that would reinforce ideal reporting of performance pertaining to financial information and business operations of companies operating in the UK. This entails the inclusion of Non-executive Directors or NEDs in the company board of Directors in the process of promoting good corporate governance. In order to promote ideal corporate governance, UK regulatory bodies instituted structures and mechanisms that would reinforce ideal reporting of performance pertaining to financial information and business operations of companies operating in the UK. This entails the inclusion of Non-executive Directors or NEDs in the company board of Directors in the process of promoting good corporate governance. NED s authority is derived from UK Corporate Governance Code that defines the legal framework of its inclusion in the boards of companies while Companies Act of 2006 which took effect in October of 2009 and was preceded by similar corporate governance initiative such as the Cadbury Report of 1992 which first raised the idea of instituting corporate governance in board rooms defining it as the system by which companies are directed and controlled . The Organisation for Economic Co-operation and Development, however, provided a more extensive explanation to make it more relevant in today s reality defining it as "Corporate governance is one key element in improving economic efficiency and growth as well as enhancing investor confidence. Corporate governance involves a set of relationships between a company s management, its board, its shareholders and other stakeholders (CIMA). In general, the duties and responsibilities of NEDs as defined in the UK Corporate Governance Code are concerned mainly in a watchdog and overseeing capacity without any line of responsibility or managerial powers just like the regular Director. Its main duty concerns not with the day to t o day operation of the business nor is consumed by the profit generation effort of the company but is rather more concerned about the ethical practice of the company. It can also do mentoring and guidance on the board on how to operate ethically as a business while still in keeping with the strategic objectives of the organization to remain relevant in the market and be profitable. We will write a custom essay sample on The Duties and Responsibilities of the Non-Executive Directors in the Corporate Governance Process or any topic specifically for you Only $17.96 $11.86/pageorder now