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Author: Roberta S. Karmel
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The common law concept of the disinterested director developed into the model of an independent director and was advocated by the Securities and Exchange Commission (SEC) as a general ideal and by court decisions in a variety of situations. The SEC has generally succeeded in imposing its corporate governance views concerning independent directors in the wake of scandals. Although the composition and behavior of securities markets and investors has changed drastically since the SEC was established in 1934, the SEC has persisted in its path dependent view that independent directors, ever more stringently defined, should dominate the boards of public companies. This article will critically address the question of what is the function and rationale for such directors. The independent director ideal has not been embraced all over the world. Neither has shareholder primacy. In particular, in some countries the controlling shareholder is considered to be not independent because one of the goals of corporate governance is the protection of minority shareholders. Also, where the government is a major shareholder, the independent director model is problematic. This Article will outline the evolution of the independent director model as championed by the SEC, and discuss criticisms of the independent director model. It also will set forth alternatives to the shareholder primacy theory of the firm because shareholder primacy is related to the independent director model. Finally, the article will discuss corporate governance models outside the United States, particularly in Europe and in China.
Author: Roberta S. Karmel
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The common law concept of the disinterested director developed into the model of an independent director and was advocated by the Securities and Exchange Commission (SEC) as a general ideal and by court decisions in a variety of situations. The SEC has generally succeeded in imposing its corporate governance views concerning independent directors in the wake of scandals. Although the composition and behavior of securities markets and investors has changed drastically since the SEC was established in 1934, the SEC has persisted in its path dependent view that independent directors, ever more stringently defined, should dominate the boards of public companies. This article will critically address the question of what is the function and rationale for such directors. The independent director ideal has not been embraced all over the world. Neither has shareholder primacy. In particular, in some countries the controlling shareholder is considered to be not independent because one of the goals of corporate governance is the protection of minority shareholders. Also, where the government is a major shareholder, the independent director model is problematic. This Article will outline the evolution of the independent director model as championed by the SEC, and discuss criticisms of the independent director model. It also will set forth alternatives to the shareholder primacy theory of the firm because shareholder primacy is related to the independent director model. Finally, the article will discuss corporate governance models outside the United States, particularly in Europe and in China.
Author: Harald Baum
Publisher:
ISBN:
Category :
Languages : en
Pages : 36
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Book Description
The paper provides a historical analysis of the rise of the independent director in the US and the UK. These two jurisdictions are commonly credited with creating the concept of the independent director and exporting it around the world.In the first half of the twentieth century, a managerialist model of corporate governance dominated in the US. Inside directors, chosen and controlled by the CEO, dominated corporate boards. The concept of the independent director and the related model of the 'monitoring board' appeared only in the 1970s. Two watershed events sparked this dramatic change: First, the sudden collapse of the major railway company Penn Central in 1970; and second, Eisenberg's influential book 'The Structure of the Corporation', published in 1976. According to Eisenberg, the board's essential function was to monitor the company's management by being independent from it. Today the reliance on independent directors as a panacea for various corporate governance ills has reached its zenith in the US.As in the US, the typical British board of the 1950s was an advisory board dominated by insiders. It was only in the 1990s, with the beginning of the British corporate governance movement subsequent to the publication of the Cadbury Report, that the concept of independent directors was embraced in the UK. Since the early 2000s independent directors have dominated on the boards of listed companies. From the UK, the concept of the independent director started to conquer the European Union as a fundamental corporate governance principle. The European Model Company Act of 2015 and, on the supra-national level, the OECD Principles of Corporate Governance of 2015 recommend assigning important tasks to independent board members.The empirical support for staffing boards with independent directors, however, remains surprisingly shaky given the ubiquitous reliance on independent directors. The global financial crisis of 2008 has added further doubts.
Author: Bruce F. Dravis
Publisher: American Bar Association
ISBN: 9781590316610
Category : Business & Economics
Languages : en
Pages : 206
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Book Description
This book is intended to provide independent directors and their advisors with an understanding of the primary legal and governance issues that have evolved in the corporate governance environment since the passage of the Sarbanes-Oxley Act in 2002. The text on the accompanying CD-ROM sourcebook offers hypertext linked footnotes to direct lawyers (or interested non-lawyers) to legal source material.
Author: Gerry Brown
Publisher: Springer Nature
ISBN: 3030513033
Category : Business & Economics
Languages : en
Pages : 282
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Book Description
Things will always go wrong in organisations. The question is how quickly will they get caught and put right? The problem facing every organisation today – our businesses, universities, health services, or the many other sporting and charitable institutions that shape our society – is that the relationship between their executive management and those whose job it is to oversee them (whether they are called non-executive or independent directors, trustees, or governors) has become unbalanced. The Independent Director in Society shows how to rebalance it. Based on original, in-depth research from Henley Business School, this is the first book to survey and analyse the governance crisis right across society rather than just focus upon the business sector. The authors show that – despite their many differences – all organisations have many issues, behaviours and problems in common. The same problems require, in many cases, the same solutions. Sometimes they don’t. The authors offer two answers. The first lies in the realm of policy. Not a need for more legislation, but a move to give the existing codes of practice back their teeth and make them fit for purpose. The second lies with independent directors themselves. Urgent improvement is needed in standards of thought and action as well as the calibre of these directors. Above all, directors need to develop an independent mindset that will enable them to make better, more accurate decisions. There are many elements to creating this culture, including selection, training and education for directors, and support from chairs and executive teams, but most of all directors themselves must recognise their responsibilities in a complex and volatile world.
Author: Yuan Zhao
Publisher: Kluwer Law International B.V.
ISBN: 9041136045
Category : Business & Economics
Languages : en
Pages : 242
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Book Description
More and more, the agenda of corporate governance reform has been calling for a dramatic change in the composition and structure of boards of publicly traded companies, with particular criticism reserved for the role of independent directors. This timely, ground-breaking book takes a new and rigorous approach to this important issue. Investigating board independence from a distinctly original perspective, the author's systematic analysis explores the effective interaction of such aspects as the following: What specific functions are expected of independent directors? How these functions fit with the unitary board structure? Why independent directors are seen as inherently necessary for corporate governance? Whether board independence can be compatible with other governance mechanisms? How mainstream company law is applied to independent directors. The analysis leads to a series of solutions designed to eliminate the real and perceived obstacles to the proper functioning of independent directors. In the process, the author discusses such critical 'moments' in corporate governance as monitoring, public relations, social responsibility, shareholder activism, the danger of 'groupthink', remuneration, collective liability, and codes of conduct. The discussion and analysis chart a course through which independent directors can better serve the goal of improving the system of corporate governance. As such, it will be greatly appreciated by investors, corporate counsel for institutional investors, and policymakers and academics in relevant areas of both business and law.
Author: Hrishikesh Desai
Publisher:
ISBN:
Category :
Languages : en
Pages : 12
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Book Description
The role of independent directors features prominently in corporate governance codes. U.S. public companies continue to adopt the best practices within the framework of strengthened securities market listing standards and legal requirements that developed, beginning with the passage of the Sarbanes-Oxley Act and have continued with the financial crisis and the passage of the Dodd-Frank Act. In India, key corporate governance laws had not kept pace with the changing contours of the economy until the recent enactment of the Companies Act of 2013, which completely revamps the country's corporate governance code. In this research study, I present a comparative assessment of the independent director models both in India and the U.S. on several key parameters, i.e. definition and selection, board and committee composition, manner of appointment, term of office, remuneration, and duties and liabilities.
Author: Cornelius Bader
Publisher: GRIN Verlag
ISBN: 3640955730
Category : Law
Languages : en
Pages : 40
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Book Description
Seminar paper from the year 2010 in the subject Law - Comparative Legal Systems, Comparative Law, grade: A+, Vanderbilt University (Law School), language: English, abstract: The “independent director” has become a centerpiece of modern corporate governance. However, the concept of “independence”, and the ability of independent directors to fulfill their roles, remains deeply problematical. In the course of the discussion on the proper role of independent directors that unfolded in Europe and the United States during the 1980s and 1990s and peaked in the wake of the Enron scandal, rules on director independence have found their way to the corporate governance regimes of developing countries that turned their head to western economies. Particularly in China and India, independent directors have taken their place on company boards, earning mixed responses from the academic and business community. What is the current state of Indian and Chinese rules on director independence? What tensions do they address and create? And what can be done to optimize the achievement of their objectives? The goal of this article is to examine the status quo of director independence in the two countries, to put the regulations into their historic and political context, to summarize practical experiences with the new institution, and to point to possible future developments.
Author: Dan W. Puchniak
Publisher: Cambridge University Press
ISBN: 1107179599
Category : Business & Economics
Languages : en
Pages : 637
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Book Description
The first in-depth analysis of the independent director in Asia: who they are, what they do and how they are regulated.
Author: Bruce F. Dravis
Publisher:
ISBN: 9781616320539
Category : Corporate governance
Languages : en
Pages : 0
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Book Description
Updated and expanded, The Role of Independent Directors provides a concise plain English overview for corporate directors of their duties and their place in the corporate governance process.
Author: Wenge Wang
Publisher:
ISBN:
Category : Corporate governance
Languages : en
Pages : 286
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Book Description
Conventional wisdom holds that independent directors can improve corporate governance in publicly traded corporations. This author argues that independent directors may play an important role in improving corporate governance in theory but not in reality and the inefficiency of independent directors lends no benefit to sound corporate governance no matter what kind of corporate governance model is adopted, either the Anglo-American unitary model or the Chinese hybrid model. Thus, to evaluate the role of independent directors in corporate governance is the subject of this PhD project. The purpose is to find out whether a sound system of independent directors, especially in the case of Chinese practice, will lead to good corporate governance. Evaluation is carried out by way of a combined research methodology of a comparative study in corporate law between the US, New Zealand and China, where independent directors are in place in publicly traded corporations, and a meta-empirical study in corporate governance with focus on independent directors and corporate performance in Chinese listed companies. The comparative study in corporate law conducted by this research has examined the role of independent directors in corporate governance in the United States, New Zealand and China, which investigates not only the evolution and development of corporate governance and independent directors but also ownership structure, the board of directors, board independence and the supervisory board in connection with the role of independent directors in corporate governance in the targeted jurisdictions. The meta-empirical study reviews and generalizes the existing empirical evidence on the relationship between independent directors and corporate performance in Chinese listed companies. The main finding presented in this research reveals that the transplantation of independent directors from the unitary board model in corporate America into the two-tier board model in corporate China is a misfit in the form of the hybrid board model in China. This suggests that there is a need to improve the efficiency and effectiveness of the monitoring role of independent directors in corporate governance in Chinese listed companies, bearing in mind the fact that independent directors are a given in the current corporate governance system in China.
