An ongoing debate in practice and academia is the purpose that non-executive directors have on a board and in an entity (i.e. see Tricker (2019) Chapters 10 and 11). Some reports, either in the media or from peak body organisations and associations, discuss the corporate governance roles non-executive directors bring to an entity, while others point to the fact that they do not have any ownership or close ties with the entity and about the amount of time they dedicate to the directorship and therefore may not be fully aligned with shareholders’ interests to maximise shareholder wealth (e.g. AICD 2019, 2018, 2016ab). The following newspaper articles, ‘AMP’s three female non-executive directors to step down’ (Doherty 2018) and Mission impossible? Westpac panel highlights directors’ dilemma’ (Bartholomeusz 2020), are examples of the current discussion about non-executive directors (ie, and executive directors) in Australia since the Hayne (Banking) Royal Commission began and could assist you in undertaking this interim assessment. In North America, United States electric vehicle maker Tesla has been reported as paying directors excessively compared, with similar-sized corporations and the impact this might have on its governance (Knight 2020). Management Assignment Help
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Task
Conduct a review of non-executive directors as a corporate governance issue and write a report about your findings. Use the concepts, tools and techniques learned in this subject to review these issues at the individual, board, entity and/or other levels. These focus questions could guide you in writing your report:
1. How are some organisations able to successfully align non-executive directors with the entity’s objectives eg. to maximise shareholder wealth (i.e. or minimise overheads for not-for-profits and charities) via organisational performance? (Hint: Clearly define the scope of your report e.g. if there is more than one type non-executive director(s), etc.). Management Assignment Help
2. Discuss what has led to the success and or limitations of non-executive directors (e.g. short-term and long-term tenures, subcommittee(s), oversight, board control, diversity, risk management, corporate social responsibility initiatives or information asymmetry, etc.) from a governance perspective.
3. What are some of the corporate governance issues that lead to entities being criticised or being less successful in aligning non-executive directors with entities objectives to maximise shareholder wealth via organisational performance, particularly when large losses or small profits occur? Discuss the reasons for this and what can be done to address them.
4. Make explicit recommendation(s) to the board on the benefits and any limitations of including (i.e. maintaining status quo/increasing/decreasing) non-executive directors in the board of the entity the report is being based on. Management Assignment Help