BOARD OF DIRECTORS AND RELATED ISSUES BOARD OF DIRECTORS – ROLES AND RESPONSIBILITIES

BOARD OF DIRECTORS – ROLES AND RESPONSIBILITIES

The board plays a crucial role in providing entrepreneurial leadership and representing the company's interests to the public It is responsible for determining the company's mission and strategic aims, selecting and appointing key executives, and establishing core values and standards The board ensures effective management performance, implements internal controls for risk assessment, and secures the necessary resources to achieve objectives Additionally, it must fulfill obligations to shareholders and stakeholders, convene regularly to fulfill its duties, and, for listed companies, appoint non-executive directors, and establish committees for remuneration, nominations, and audits Furthermore, the board is tasked with evaluating its own performance, reporting to shareholders annually, and ensuring that all directors in FTSE 350 companies are presented for re-election each year.

An effective board showcases a clear strategy that aligns with its capabilities, ensuring vigorous implementation and monitoring of key performance drivers It maintains a sharp focus on the perspectives of the City and other key stakeholders while regularly evaluating its performance to drive continuous improvement.

Legal Functions of Board of Directors:

Corporate Opportunity (Ahead of Personal)

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A director must act in good faith and prioritize the best interests of the corporation, aligning their actions with those of a reasonable individual in a similar position under comparable circumstances.

Attention at meetings, Reliance on management and professional information and Delegation (to management to operate the business). Decision Making – exercise reasonable business judgement

Some examples of mission statements:

Tầm nhìn của chúng tôi là nỗ lực trở thành một trong những công ty hàng đầu cung cấp dịch vụ mặt đất chất lượng tại các sân bay khu vực Châu Á.

Sứ mệnh của chúng tôi là cung cấp dịch vụ hàng không đạt tiêu chuẩn quốc tế, nhằm đáp ứng nhu cầu ngày càng cao của khách hàng Chúng tôi cam kết thực hiện điều này thông qua hệ thống quản trị doanh nghiệp hiệu quả và việc sử dụng nguồn lực tiên tiến.

Uy tín là tiêu chí hàng đầu, phản ánh sự an toàn và chất lượng dịch vụ vượt trội Đảm bảo chỉ số tin cậy trong dịch vụ và không ngừng nâng cao uy tín khách hàng là những mục tiêu quan trọng mà chúng tôi hướng tới.

VIAGS luôn cố gắng duy trì, cam kết với khách hàng, hãng hàng không.

Tinh nhạy là sự kết tinh của sự hợp nhất, với những điểm nổi bật và tinh túy trong chuỗi cung ứng dịch vụ của mỗi sân bay Những yếu tố này sẽ được chọn lọc và kế thừa, nhằm tạo ra một chương trình chất lượng dịch vụ đồng bộ và nhất quán.

Tận tâm là giá trị cốt lõi trong công việc, thể hiện đạo đức nghề nghiệp cao Mỗi thành viên trong tổ chức cần nhận thức rõ ràng về nhiệm vụ của mình, từ đó thể hiện sự tận tâm trong công việc và sự chu đáo đối với khách hàng.

Trong chiến lược phát triển, con người được đặt lên hàng đầu, với mục tiêu hướng đến khách hàng thông qua sự thấu hiểu và cam kết Nhân viên được coi là tài sản quý giá, cần được bồi dưỡng và phát triển một cách công bằng, đồng thời ghi nhận thành quả của họ một cách nhân văn.

BOARD MEETING AND BOARD STRUCTURE

A definition of board meeting

A Board Meeting is a formal gathering of an organization's board of directors and invited guests, conducted regularly or as necessary Its purpose is to review organizational performance, discuss policy matters, tackle significant issues, and conduct the board's legal business, all under the leadership of the chairperson.

Board agenda items

A board agenda is likely to include the following topics:

The initial agenda item typically involves a review of the company's performance since the previous board meeting, focusing on whether key performance metrics are trending positively and if established targets have been met.

Discussions regarding the company's performance should focus on brief summaries, while comprehensive reports should be accessible for members to examine after the meeting Emphasize key pain points and highlights during the conversation, reserving detailed information for subsequent follow-up calls.

Evaluating past successes and challenges is essential for planning future strategies that foster organizational growth A productive board meeting should focus primarily on outlining and discussing the implementation of these future strategies to ensure effective execution within the company.

Once the board of directors has established strategies, it is crucial to discuss the key performance indicators (KPIs) linked to these strategies Developing action plans involves pinpointing specific metrics that will effectively measure the success of the implemented strategies.

With implementing new roadmaps and strategies across an organization comes new obstacles and challenges Board meetings are a great time to discuss roadblocks and encourage ideas to work around them.

After addressing all key details, the board will discuss future action plans that impact the company's direction These proposals can be presented and voted on during the meeting.

In conclusion, the board meeting should satisfy these items:

- Agenda should strike a balance between short and long-term issues and every director should have the opportunity to place items on the agenda

- All the topic should have supportive information, including risk and alternatives identified and be distributed in the right time.

Time to set up the agenda

Board meetings are typically held at regular intervals, such as quarterly or biannually, but may occur more frequently based on the company's needs and the directors' preferences These meetings serve to address company challenges, assess performance, and deliberate on the implementation of new policies.

Board meetings should be limited to two to three hours to respect the valuable time of board members These meetings must concentrate on strategic-level topics, while smaller details should be addressed in follow-up syncs or separate meetings.

=> Meeting should be regular or at need and attendance expected.

Board structure

In the traditional two-tier board structure, a separate board of supervisory directors supervises the board of managing directors and gives advice to the managing directors

In a one-tier board structure, the executive directors and non-executive, supervising, directors are all members of one and the same board They jointly form a single corporate body.

The one-tier board structure reflects neo-liberal values, emphasizing the significance of investors and a free-market economy, while the German two-tier model highlights the importance of stakeholders, co-determination, and managerialism.

There is a single board of directors,

Structure comprising executive and non-executive directors (NEDs).

The management (operating) board which is responsible for the day- today running of the business, consisting of executives only and led by the chief executive.

The supervisory (corporate) board with a wider membership, responsible for the strategic oversight of the organisation and led by the chairman

The decision-making process is expected to be less time consuming as

Decision-making process decisions, which otherwise would require supervisory board approval, only have to pass one body.

In a two-tier board structure, executive discussions regarding business operations occur in separate meetings, ensuring that higher board members do not hear these discussions, which contrasts with a unitary board system where all members convene in a single meeting.

The one-tier board system, rooted in the Anglo-Saxon model of corporate governance, is prevalent in countries like the United States, Canada, Australia, and the United Kingdom This model emphasizes capital markets as the primary mechanism for corporate oversight, with investors playing a crucial role in monitoring management through the buying and selling of shares and voting at shareholder meetings As a result, management operates with a degree of autonomy, as the high liquidity of the market diminishes the need for stringent internal control Consequently, the relationship between managers and shareholders tends to be brief and formal.

Most listed companies typically have boards consisting of eight to twelve members, organized into four main structures: an all-executive director board, a majority executive director board, a majority non-executive director board, and an all non-executive director board.

- Advantages and disadvantages of one-tier board:

The streamlined one-tier board system facilitates superior information flow due to its compact structure and frequent meetings This format fosters strong relationships among members and allows for a deep understanding of the business, enhancing the board's supervisory capabilities with a clear majority of experts among both executive and non-executive members.

Faster decision making and reduced bureaucracy The structure of one-tier board enhancesfaster decision-makings because there is no separate

TIEU LUAN MOI download : skknchat@gmail.com supervisory board Thus, the need for separat eapproval of decisions does not arise.

Issues specific to the unitary board tend to relate to the role of NEDs.

- Main role of NED in unitary:

NED expertise: the implied involvement of NEDs in the running of the company rather than just supervising.

NED empowerment: they are as responsible as the executives and this is better demonstrated by their active involvement at an early stage.

Compromise: less extreme decisions developed prior to the need for supervisory approval.

Responsibility: a cabinet decision-making unit with wide viewpoints suggests better decisions.

Reduction of fraud, malpractice: this is due to wider involvement in the actual management of the company.

Improved investor confidence: through all of the above.

These are predominantly associated with France and Germany Using Germany as an example, there are two main reasons for their existence:

Codetermination: the right for workers to be informed and involved in decisions that affects them This is enshrined in the Codetermination Act (Germany) 1976.

In Germany, banks maintain significantly closer relationships with companies compared to the UK, often acting as shareholders This close partnership allows shareholders to deposit their shares and associated rights with their banks, fostering a collaborative financial environment.

This creates a backdrop to creating structures where these parties are actively involved in company affairs, hence the two-tier structure.

Structure of two-tier board:

- Lower tier: management (operating) board responsible for day-to-day running of the enterprise generally only includes executives the CEO co-ordinates activity.

- Upper tier: supervisory (corporate) board

Appoints, supervises and advises members of the management board Strategic oversight of the organization

Includes employee representatives, environmental groups and other stakeholders' management representatives

The chairman co-ordinates the work

Members are elected by shareholders at the annual general meeting (AGM) Receives information and reports from the management board.

Advantages of a two-tier board:

- Clear separation between those that manage the company and those that own it or must control it for the benefit of shareholders.

- Implicit shareholder involvement in most cases since these structures are used in countries where insider control is prevalent.

- Independence of thought, discussion and decision since board meetings and operation are separate.

- Direct power over management through the right to appoint members of the management board.

Problems with a two-tier board:

- Dilution of power through stakeholder involvement.

- Isolation of supervisory board through non-participation in management meetings.

- Agency problems between the two boards.

- Added bureaucracy and slower decision making.

- Reliant upon an effective relationship between chairman and CEO.

Comparison of One-tier (Unitary) and Two-tier Governance Board Systems

One significant distinction between structural board systems is their size; typically, one-tier boards have fewer members and are smaller compared to two-tier boards.

- Board Meetings: There are more frequent meetings in a one-tier structure than a two-tier structure.

The one-tier board system prioritizes the rights and interests of shareholders, ensuring their financial returns are safeguarded In contrast, the two-tier structure emphasizes the well-being of all stakeholders, fostering a more inclusive approach to corporate governance that balances the needs of shareholders, employees, customers, and the community.

- Orientation: Two-tiered boards are representative in nature with network orientation, while one-tiered boards are independent and more market oriented.

Directors' emoluments in the US and Germany are shaped by their respective governance systems, with distinct approaches to board compensation In the US, executive remuneration is determined by the board in collaboration with remuneration consultants, whereas in Germany, the supervisory board sets the management board's compensation, albeit within the bounds of statutory regulations.

Composition of the board

Executive directors: are directors who also have executive management responsibility in the company They are normally full-time employees of the company Eg: CEO, CFO.

Non-Executive directors (“NEDs”) :are directors who do not have any executive management responsibility in the company (They might be an executive director in a different company):

- NEDs are not employees of the company

- They are not full-time employees.

Independent directors: an independent director is an individual who:

- Has no link to a special interest group or stakeholder group

- Has no significant personal interest in the company such as a significant contractual relationship of the company.

BOARD COMMITTEES

Board committee structure

The nomination committee plays a crucial role in overseeing the board appointment process by evaluating the company's needs and making informed recommendations to the board This responsibility encompasses the selection of both executive and non-executive directors.

To identify candidates to fill vacancies on the board

Review regularly the structure, size and composition of the board and make recommendations to the board.

Consider the balance between executives and NEDs on the board of directors Ensure appropriate management of diversity to board composition.

Provide an appropriate balance of power to reduce domination in executive selection by the CEO/chairman.

Regularly evaluate the balance of skills, knowledge and experience of the board.

Give full consideration to succession planning for directors.

Be seen to operate independently for the benefit of shareholders.

The role of the remuneration committee is to have an appropriate reward policy that attracts retains and motivate directors to achieve the long-term interests of shareholders.

Members of remuneration committees must prioritize independence and transparency while being mindful of potential conflicts of interest in their pay decisions Remuneration policies should align with the company's long-term success, recognizing that there is no one-size-fits-all solution applicable to every organization.

The composition of the remuneration committee is crucial, ensuring that no individual is involved in determining their own pay It is vital that the majority of the committee members are independent directors, while executives must be excluded from this decision-making process.

- The committee should agree with the main board a policy for remuneration

- Set detailed remuneration for all executive directors and the chairman, including pension rights and any compensation payments.

In a performance-related pay scheme, it is essential for the committee to establish clear performance targets, ensuring that executive directors and key management receive fair compensation for their individual contributions to the company's overall success.

- The committee should decide on pension arrangement

- Negotiate and agree the remuneration of each individual executive director

To assure shareholders, it is crucial that the compensation for executive directors and key management is determined by unbiased individuals who have no personal stake in the committee's decisions.

The primary task of the audit committee is to oversee the relationship with external auditors to ensure the quality of the company’s financial statements.

Main responsobility of audit committee:

- Monitor the integrity of the company financial statement and any other formal statement relating to the company’s financial performance

- Review the company’s internal financial controls

- Review the company’s internal and risk management system (unless this responsibility is given to risk committee)

- Make recommendations to the board about the appointment, re- appointment or removal of audit firm

- Approve the remuneration and terms of engagement of the external auditors.

- Review and monitor effectiveness of the audit process.

Include internal controls and risk management.

Importance of committees

Board sub-committees are a generally accepted part of board operations.

Positives that come out of the creation and use of such structures are:

Reduces board workload and enables them to improve focus on other issues. Creates structures that can use inherent expertise to improve decisions in key areas.

Communicates to shareholders that directors take these issues seriously.

Communicates to stakeholders the importance of remuneration and risk.

Satisfy requirements of the UK Corporate Governance Code (2010) (or other governance requirement.

NON – EXECUTIVE DIRECTORS (NEDS)

Roles of Non-Executive Director

Non-Executive Directors, often referred to as independent or outside directors, play a crucial role in challenging a company's direction and performance while providing an objective perspective Unlike executive directors who hold C-level or managerial positions, Non-Executive Directors are not directly involved in day-to-day operations, allowing them to better understand the company's interests without the bias of potential conflicts of interest that may arise between management and stakeholders.

The role of Non-Executive Directors is broad They challenge, question and monitor the CEO and senior management; they bring an independent perspective to decision-

Download TIEU LUAN MOI at skknchat@gmail.com Board members play a vital role in holding senior management accountable while also providing support and mentorship to the CEO and other leaders Acting as a "critical friend," they prioritize the interests of the company's stakeholders.

Non-executive directors typically sit on the main board and have responsibility on the board sub-committees (e.g Audit Committee, Risk Committee, Nomination

- The role of the Non-Executive Director has the following key elements:

Non-executive directors (NEDs) bring an outsider's perspective that can enhance the strategic direction of a company Their broader view of external factors impacting the business environment allows them to contribute creatively and knowledgeably to strategy formation In this role, NEDs serve as constructive critics, evaluating the objectives and plans developed by the chief executive and the executive team, ultimately fostering more effective decision-making.

Monitoring Performance: Non-Executive Directors should scrutinise the performance of management in meeting agreed goals and objectives and monitor the reporting of performance.

Risk: Non-Executive Directors should satisfy themselves on the integrity of financial information and that financial controls and systems of risk management are robust and defensible.

Non-Executive Directors play a crucial role in setting fair remuneration for executive directors, as well as in the appointment and removal of these executives when necessary Additionally, they are integral to succession planning within the organization.

- In order to fulfil their roles, Non-Executive Directors need to:

Build a recognition by executives of their contribution in order to promote openness and trust

Be well-informed about the company and the external environment in which it operates

Have a strong command of issues relevant to the business

Insist on a comprehensive, formal and tailored induction, continually develop and refresh their knowledge and skills to ensure that their contribution to the board remains informed and relevant

Ensure that information is provided sufficiently in advance of meetings to enable thorough consideration of the issues facing the board

Insist that information is sufficient, accurate, clear and timely

Uphold the highest ethical standards of integrity and probity

Question intelligently, debate constructively, challenge rigorously and decide dispassionately

Promote the highest standards of corporate governance and seek compliance with the provisions of the Combined Code wherever possible.

Non-Executive Directors may be appointed to serve on various board committees as requested by the Board Upon their appointment, they will receive guidance on the committee's terms of reference and any additional responsibilities associated with their role.

Important: Non-executive directors are equally liable for the success or failure of a business, as outlined by statutory requirements and tax laws.

Independent NED

The Code emphasizes the importance of maintaining a balanced board composition by ensuring a mix of non-executive directors (NEDs) and executives To mitigate the risk of excessive power concentration among executives, the board should comprise at least 50% independent NEDs, not including the chair.

A designated senior independent director (NED) should be accessible to shareholders for addressing concerns that cannot be resolved through the usual channels, such as the chairman, CEO, or finance director.

To provide a detached and objective view of board decisions.

To provide expertise and communicate effectively

To provide shareholders with an independent voice on the board.

To provide confidence in corporate governance.

To reduce accusations of self-interest in the behaviour of executives.

A definition of independence is proposed for incorporation into the Combined Code.

A non-executive director is deemed independent when the board assesses that the director possesses impartial character and sound judgment, free from any relationships or circumstances that might influence or seem to influence their decision-making.

A director may have a conflicted relationship with a company if they are a former employee within the last five years, have had a material business relationship in the past three years, receive additional compensation beyond their director's fee, or are involved in the company's share option or pension schemes Close family ties to company advisers or directors, cross-directorships with other companies, representation of a significant shareholder, or serving on the board for over a decade can also indicate potential conflicts of interest.

A cross directorship occurs when two or more directors serve on each other's boards, typically involving non-executive roles for the secondary appointments.

Director A serves as an executive director on the board of company X while simultaneously holding a non-executive role on the board of company Z Meanwhile, Director B is an executive member of company Z and also occupies a non-executive position at company X.

Cross directorships can compromise the independence of non-executive directors (NEDs) by creating conflicts of interest When a director evaluates a colleague's performance, and that colleague is also involved in assessing the first director's performance, impartiality is lost This situation may lead to decisions that do not prioritize the best interests of the company's shareholders, undermining the integrity of the board.

In practice, such arrangements may also involve some element of cross shareholdings which further compromises the independence of the directors involved.

It is for this reason the cross directorships and cross shareholding arrangements are explicitly forbidden by many corporate governance codes of best practice.

Disadvantages and advantages of NED in Board of Directors

Monitoring: they offer a clear monitoring role, particularly on remuneration committees to dampen the excesses of executives.

Expertise: to expand this resource available for management to use.

Perception: institutional and watchdog perception is enhanced because of their presence.

Communication: the implied improvement in communication between shareholders' interests and the company.

Discipline: NEDs may have a positive influence on the success or otherwise of takeovers.

Unity: lack of trust and needless input can affect board operations.

Quality: there may be a poor gene pool of NEDs willing to serve.

The proposed removal of stock options from compensation packages, along with the equal legal liability for company operations, raises concerns about the attractiveness of the job, prompting potential candidates to reconsider their interest in the position.

CEO AND CHAIRMAN

Responsibilities

It is vital for good corporate governance to separate the roles of CEO and chairman.

The division of responsibilities between the chairman and CEO should be clearly established, set out in writing and agreed by the board.

The roles of CEO and chairman are crucial, as the CEO typically holds significant authority in selecting executive directors for the board, while the chairman often exerts considerable influence in appointing non-executive directors (NEDs).

The overall responsibility of the chairman is to:

- Ensure that the board sets and implements the company's direction and strategy effectively, and

- Act as the company's lead representative, explaining aims and policies to the shareholders.

Specific responsibilities of the chairman: The specific responsibilities of the chairman, inter alia, are to:

- Provide leadership to the board, supplying vision and imagination, working closely with the CEO.

- Take a leading role in determining the composition and structure of the board which will involve regular assessment of the:

Balance between executive directors and NEDs

Interaction, harmony and effectiveness of the directors

- Set the board's agenda and plan board meetings

- Chair all board meetings, directing debate toward consensus

- Ensure the board receives appropriate, accurate, timely and clear information facilitate effective contribution from NEDs

- Hold meetings with the NEDs, without the executive directors present

- Chair the AGM and other shareholders' meetings, using these to provide effective dialogue with shareholders

- Discuss governance and major strategy with the major shareholders

- Ensure that the views of shareholders are communicated to the board as a whole.

The overall responsibility of the CEO is to:

Take responsibility for the performance of the company, as determined by the board's strategy

Report to the chairman and/or board of directors.

Specific responsibilities of the CEO:

The specific responsibilities of the CEO, inter alia, are to:

Develop and implement policies to execute the strategy established by the board Assume full accountability to the board for all aspects of company operations, controls and performance

Manage financial and physical resources

Build and maintain an effective management team

Put adequate operational, financial, planning, risk and internal control systems in place

Closely monitor operations and financial results in accordance with plans and budgets

Interface between board and employees

Assist in selection and evaluation of board members

Represent the company to major suppliers, customers, professional associations, etc.

Comparisation between CEO and Chairman ‘s Roles

Executive Director Full-time employee Part-time Usually independent

All executive manager report, directly or indirectly, to the CEO.

The CEO report to the chairman (as leader of the board generally).

No executive responsibilities Only the company secretary and the CEO report to the chairman directly or matters relating to the board.

The chairman reports to the company shareholders, as leader of the board.

Head the executive management team.

To draft proposed plans, budgets and strategies for board approval.

To implement decision of the

Leader of the board, with responsibility for its effectiveness.

To make sure that the board fulfills its role successfully.

To ensure that all directors contribute to work of the board.

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The UK Corporate Governance Code (2010) emphasizes the necessity of separating the roles of chairman and CEO, stating that there must be a distinct division of responsibilities at the top of the company to prevent any individual from having unchecked decision-making power.

- Chairman should be independent in the same way that NEDs are designated as being independent If not, reasons must be clearly disclosed to major shareholders.

- The code states the Chairman should, on appointment, meet the independence criteria set out in the provisions, but thereafter the test of independence is not appropriate to the Chairman.

Reasons for splitting the role:

- Representation: the chairman is clearly and solely a representative of shareholders with no conflict of interest having a role as a manager within the firm.

- Accountability: the existence of the separate chairman role provides a clear path of accountability for the CEO and the management team.

- Temptation: the removal of the joint role reduces the temptation to act more in self-interest rather than purely in the interest of shareholders.

- The chairman is responsible for leading the board and the CEO is responsible for leading the executive management Combining the two roles creates a position of dominant power;

- They are two different roles, requiring different sets of skills The same individual may not have the set of skills required to perform each role well;

A dominant individual on the board can disrupt the necessary balance, potentially hindering the effectiveness of Non-Executive Directors (NEDs) in their contributions.

- In some cases, there may be a risk of the chairman/CEO being a domineering personality, who disregards the views and opinions of board colleagues.

The UK Combined Code advises that a company's CEO should not transition into the role of chairman, even after stepping down as CEO.

The UK Combined Code advises that the chairman of a company should be independent at the time of their appointment, which is not feasible if the appointee has previously served as the CEO, whether current or former.

- Unity: the separation of the role creates two leaders rather than the unity provided by a single leader.

- Ability: both roles require an intricate knowledge of the company It is far easier to have a single leader with this ability rather than search for two such individuals.

- Human nature: there will almost inevitably be conflict between two high- powered executive offices.

4 Let talk about the BrightCo case to understand more about CEO and Chairman

Three years ago, the CEO and chairman of BrightCo announced his retirement after a decade in the role and a total of 30 years with the company Succession planning was seamless, as Dan Bolowski, who had been serving as second in command for several years, successfully transitioned into the leadership position.

Investors experienced a thrilling journey as minor declines in share price were overshadowed by significant gains Bolowski implemented a bold "slash and burn" acquisition strategy, tripling the company's size by entering new global markets He focused on purchasing, restructuring, and reselling large corporations, ultimately generating substantial profits.

The board of directors is satisfied with the CEO's performance, with seven out of ten members being company executives who contributed to this success The remaining three members were appointed by the former CEO for their expertise in BrightCo's traditional markets, yet they lack regular communication with shareholders The board meets infrequently and primarily focuses on reviewing current performance Mr Bolowski enjoys significant autonomy in his role, which is largely viewed as a key factor in the company's favorable trading position.

Shareholders are satisfied with the company's performance, but some institutional investors have expressed concerns about the sustainability of BrightCo's current strategy They question whether the company has the financial resources to support its initiatives and whether its exposure to unknown markets poses significant risks, potentially making it vulnerable.

During the recent board meeting, Mr Bolowski confidently dismissed any criticism and asserted his commitment to elevating the firm to new heights, a declaration that was met with enthusiastic applause from all attendees.

(a)With reference to the scenario, discuss changes to governance structure that you would recommend for this company.

(b)Assuming the changes recommended in part (a) are carried out, describe the possible role of a new board of directors.

The governance structure of BrightCo will need to adapt in response to operational shortcomings, despite the company's current success To ensure continued prosperity, it is crucial to address the concerns of institutional investors, who play a significant role in the company's ownership Meeting their expectations is essential for the financial success of BrightCo, as the company must align its objectives with the interests of its shareholders.

The governance scenario highlights a significant concern regarding the absence of a clear distinction between the roles of CEO and Chairman This issue is particularly contentious, as the UK’s Combined Code strongly advises that these two positions should be held by different individuals to ensure effective oversight and accountability.

The Chairman represents the interests of shareholders, while the CEO is responsible for the day-to-day operations of the company Currently, it seems that the CEO/Chairman is prioritizing operational management over addressing the wishes, needs, and concerns of shareholders.

The Code advocates for an independent Chairman who has no previous ties to the company, fostering unbiased decision-making free from executive management's influence Appointing an "insider" to this role may lead to conflicts, as it can result in strategies that elevate shareholders' risk exposure beyond acceptable limits.

A critical issue facing boards is the insufficient representation of non-executive directors (NEDs), who provide valuable expertise and oversee shareholder interests According to the Combined Code, UK companies should maintain a balance of at least 50% non-executive to executive directors, with the Chairman holding a casting vote to prioritize shareholder perspectives in case of disputes Currently, the number of NEDs is inadequate to fulfill this requirement effectively.

Current non-executive directors lack regular interaction with shareholders To address this issue, Provision A3 of the Combined Code suggests establishing a senior independent role that serves as a communication channel for shareholder engagement.

Continuing Professional Development – CPD

Continuing Professional Development (CPD) refers to the learning activities that professionals undertake to improve and advance their skills This approach fosters a proactive and intentional learning environment, allowing individuals to consciously enhance their abilities rather than simply responding to challenges as they arise.

Continuing Professional Development (CPD) incorporates various learning methodologies, including training workshops, conferences, e-learning programs, and best practice sharing, all aimed at enhancing individual professional growth With over 1,000 institutes and professional bodies in the UK, this number is expected to rise, highlighting the growing importance of CPD in fostering effective professional development.

The increasing emphasis on vocational and skills-based education highlights the need for academic qualifications to incorporate practical learning A structured and methodical approach to education enables employers to retain key personnel and enhance the skills and knowledge within their organizations, ensuring a sustainable competitive advantage.

Participating in Continuing Professional Development (CPD) is essential for keeping academic and practical qualifications current, enabling individuals to consistently enhance or acquire new skills This process is beneficial for people of all ages, occupations, and educational backgrounds, ensuring they remain competitive and relevant in their fields.

The importance of continuing professional development:

CPD ensures your capabilities keep pace with the current standards of others in the same field.

Continuous Professional Development (CPD) is essential for maintaining and enhancing the knowledge and skills necessary to provide exceptional service to customers and clients It keeps your expertise relevant and up to date, allowing you to stay informed about the evolving trends and directions in your profession In today's fast-paced environment, where change is constant, failing to engage in CPD can lead to outdated knowledge and skills, ultimately hindering your professional growth and success.

Continuous Professional Development (CPD) enables you to enhance your contributions to your team, increasing your effectiveness in the workplace This growth not only propels your career forward but also opens doors to new leadership and management opportunities, allowing you to influence, coach, and mentor others.

Continuous Professional Development (CPD) keeps you engaged and enhances your appeal in your field While experience is valuable, it often leads us to repeat past actions By participating in targeted CPD, you can explore new opportunities, acquire fresh knowledge, and develop diverse skills.

Continuing Professional Development (CPD) enhances your understanding of professional responsibilities and fosters a greater appreciation for the consequences of your work Additionally, CPD contributes to the advancement of knowledge and technology in your field, ensuring you remain at the forefront of your profession.

CPD can lead to increased public confidence in individual professionals and their profession as a whole.

Continuing Professional Development (CPD) plays a crucial role in enhancing protection and quality of life across various professions, particularly in high-risk and specialized practice areas By promoting sustainability and improving environmental and economic conditions, CPD facilitates effective oversight that may be challenging to implement on an individual case basis.

DIRECTORS – PERFORMANCE EVALUATION

Directors’ remuneration

Directors' remuneration refers to the compensation provided to company directors, which can include fees, salaries, or the utilization of company assets, all of which require approval from both shareholders and the board of directors.

The process of directors' remuneration came about because of shareholder concerns that directors were rewarding themselves large salaries despite showing poor profits or revenue.

The Greenbury Report (1995) addressed shareholder concerns about directors' remuneration by proposing a framework that balances salary and performance, aiming to restore confidence among shareholders.

The remuneration committee is responsible for establishing a reward policy designed to attract, retain, and motivate directors, ensuring alignment with the long-term interests of shareholders.

The committee is, and is seen to be, independent with access to its own external advice or consultants.

It has a clear policy on remuneration that is well understood and has the support of shareholders.

Performance packages produced are aligned with long-term shareholder interests and have challenging targets.

Reporting is clear, concise and gives the reader of the annual report a bird's-eye view of policy payments and the rationale behind them.

The overall responsibilities of the remuneration committee are to:

Establish and consistently evaluate the framework and policies governing the remuneration and employment conditions for the board chairman and executive directors, including the design of performance targets and bonus schemes.

Recommend and monitor the level and structure of the remuneration of senior managers.

Establish pension provision policy for all board members.

Set detailed remuneration for all executive directors and the chairman, including pension rights and any compensation payments.

Ensure that the executive directors and key management are fairly rewarded for their individual contribution to the overall performance of the company.

To assure shareholders, it is essential to show that the compensation for executive directors and key management is determined by impartial individuals who have no personal stakes in the committee's decisions.

Agree any compensation for loss of office of any executive director.

Ensure that provisions regarding disclosure of remuneration, including pensions, as set out in the Directors' Remuneration Report Regulations 2002 and the Code, are fulfilled.

Tiêu đề	Board Of Directors – Roles And Responsibilities
Tác giả	Bùi Trung Tín, Nguyễn Thị Đan Thùy, Vũ Thị Thúy, Đoàn Thị Quỳnh Thương, Quách Thị Bích Thủy
Người hướng dẫn	ThS. Mai Thi Phuong Thao
Trường học	Vietnam National University Ho Chi Minh City
Chuyên ngành	Professional Ethics and Corporate Governance
Thể loại	Tieu Luan Moi
Thành phố	Ho Chi Minh City

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