Business Ethics and Corporate Governance, Second Edition

OTHER REMUNERATION PACKAGES

Executive directors are employees of the company, and as such, they receive a salary package. Shareholders’ approval is not required while their salary package is fixed by the board of directors. It would be a healthy practice, however, that the board fixes the salary on the recommendation of the remuneration committee and that the concerned executives themselves have no say on the matter.

With regard to the remuneration for non-executive directors, the board has the responsibility to fix their remuneration and to determine the appropriate allocation of the aggregate remuneration between different directors. Under such schemes, larger amounts would be allocated to those directors who shoulder greater responsibilities ...