ASX Company has got a framework of eight corporate governance principles, where in this section; only three of them will be considered. The three principles to be considered are as follows: lay Solid foundations for management and oversight; promote ethical and responsible decision-making and; remunerate fairly and responsibly (ASX 2007).
It is important that Companies candidly spell out the duties and responsibilities of the board of directors and the management function. The rest of the staff should be conversant with the duties and responsibilities of their superiors to ease effective flow in the activities of the company. This is important because a bigger portion of the decision making process is entrusted to the board and the management.
A good demarcation between the roles of the board of directors and other senior executives in the company is equally important. This information helps the members of staff to perform effectively and appropriately since the decision making mandate is brought closer to other employees. For example, if a board of director is not available, approvals that might need his/her attention will not need to wait as there are other members of staff that can act on the absent director’s behalf. However, the status of the executive arm of the company is not immune to scrutiny; therefore, a report should be processed in regard to their performance.
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