Business Ethics and Corporate Governance, Second Edition

CORPORATE GOVERNANCE SYSTEMS

The board of directors seldom appears on the management organization chart yet it is the ultimate decision making body in a company. The role of management is to run the enterprise while the role of the board is to see that it is being run well and in the right direction.

Management always operates as a hierarchy. There is an ordering of responsibility, with authority delegated downwards through the organization and accountability upwards to the ultimate boss. By contrast, the board members need to work together as equals, reaching agreement by consensus or, if necessary, by voting. In almost all dispensations each director bears the same duties and responsibilities under the law. A useful way of depicting the interaction ...