Women on Corporate Board of Director Essay Example
Women on Corporate Board of Director Essay Example

Women on Corporate Board of Director Essay Example

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  • Pages: 17 (4491 words)
  • Published: August 25, 2017
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Introduction: The participation of women on corporate boards was less frequent in the past, but there has been an increase in their involvement in recent years.

The presence of women on company boards has grown in recent years, with a greater number of women assuming important roles. Historically, these positions were primarily held by men; however, women have gradually become more engaged and have had a beneficial influence on the advancement of companies. A recent study supports this trend.

Including adult females on boards of managers is an effective strategy to enhance profitability and governance within companies. This is because women are more inclined to adopt a collaborative approach towards decision-making, ensuring a broader consensus that incorporates input from all participants. Conversely, men are more inclined to adhere strictly to rules.

According to McMaster Business School Professor Chris Bart, having


women on a board of directors can reduce the likelihood of losing temper or behaving aggressively. This phenomenon is referred to as the "Mom effect." Additionally, it has been found that having one or more women on a board is associated with increased sales.

While some states have implemented regulations mandating a minimum level of female representation on corporate boards, aimed at enhancing stockholder returns and mitigating corporate bankruptcies, others do not impose any requirements for gender diversity. Examples of such states include the United States and Singapore.

Various countries have taken different approaches to promote gender equality on corporate boards. For example, Malaysia has set a minimum quota for women's representation, while Norway has implemented laws that enforce female presence on boards.

Board of Directors is indispensable in every organization as they ensure the company's strategy and goals are being

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accomplished. Their duties encompass problem-solving, decision-making, and strategic planning for potential projects.

In various aspects, their contribution to the company can help it achieve its highest value. Thus, this section will provide a brief explanation of manager and board structure, role, and responsibilities.

and the legal demand in company’s board’s directory ( Amendment Act 2007 ) . The board of managers leads and controls a company and hence an effectual board is cardinal to the success of the company. The board is the nexus between directors and investors. and is indispensable to good corporate administration and investor dealingss. The responsibility of the board is responsible to determine the company’s purposes and strategies.

Programs and policies are implemented to achieve specific purposes. The high public presentation board has three core aims: providing superior strategic guidance for the company's growth and prosperity, and ensuring accountability to stakeholders.

including stockholders, employees, clients, providers, regulators, and the community, so.

We assure you that our company is overseen by an exceptionally skilled executive team. In fact, to gain a deeper understanding of women and the board of managers, we would like to clarify the definition of the board of managers as stated in the financial dictionary.

A board of managers is a group of individuals chosen by stockholders to advocate for their interests and ensure that the company's management acts in their best interest. The president or chairperson leads the board. Therefore, including women on the board means involving them in managing the company as part of the board. This situation, known as gender diversity on the board, is crucial for effective representation. It is imperative for the board to have a balanced mix of

men and women to achieve effectiveness.

The advancement of women to board-level positions is unequal worldwide, including in the UK. This imbalance cannot be solely attributed to women lacking knowledge. In fact, women are excelling in education and qualifications beyond expectations.

According to 2011 OECD data, females outperform males in all levels of education, including postgraduate studies.
The Significance of the Board of Directors
The board of directors has a vital role in any organization and is composed of individuals who have the power to guide the organization towards its objectives.

The board of managers comprises individuals selected by the company's stockholders to serve as legal guardians and represent various stakeholders, such as clients, the community, funders, authorities, and taxpayers. These volunteers are entrusted with effectively supervising the corporation based on their expertise and principles.

Properties such as trustiness, hardworking, confident, able to make determinations with accuracy, honesty, and intelligence.

The board of managers should strive for a strong sense of unity and collaboration, recognizing that working together as a collective is essential to achieving organizational objectives and gaining a competitive advantage in the global market. It is important for board members to collaborate as a cohesive unit rather than operating individually. It must be noted that individual board members only possess authority when granted through a majority vote from the entire board.

The role of boards of managers is often a mystery to communities as their work is unseen and hard to understand. However, when problems come up, they become the main focus and center of attention in resolving the issue. Despite being accountable for maintaining the company in the best possible manner, their work largely goes unnoticed.

Despite progress, some company managers

continue to engage in fraudulent activities. Examples of such cases include the scandals surrounding Enron, Worldcom, and Parmalat.

The managers of Enron and Worldcom were held accountable for the fraudulent activities that occurred. In regards to Enron, they were required to provide a total compensation of $168 million to investor complainants, with $13 million not being covered by insurance. Likewise, Worldcom managers had to pay a sum of $36 million.

The organization incurred a total of $18 million in expenses, with $18 million being paid out of pocket. The boards of managers in an organization have their own role and responsibilities. They are accountable for defining the organization's mission, which is the purpose for its formation, as well as its values statements.

The individual is responsible for planning and overseeing the organization's strategic program to accomplish its mission. This includes the hiring, measuring, and supporting of individuals.

Occasionally, it may be necessary to terminate the executive manager. The financial unity of the organization's operations and records should be maintained. The organization should also represent the thoughts, culture, needs, and wants of the community it serves.

Developing policies and processes that ensure employees are treated reasonably and within the law. To hire support and assess and fire the Executive Director, boards of managers are responsible for finding and hiring executive managers who possess the necessary skills and knowledge.

Experience and ability to be leaders in their daily activities, the board should be ready to provide support to the executive manager when requested and ensure that the executive is adequately compensated and has authority over staff. Appraisal involves both monitoring the executive's actions and evaluating their inherent ability.

The monitoring of executive actions

can, in part, be perceived as a board's responsibility to remain alert against any dishonest or illegal behavior carried out by executives. Nevertheless, it is important to maintain a realistic outlook.

Having a clear view of executive wrongdoing is challenging for a board by itself as it heavily depends on the actions of external auditors, regulators, and other stakeholders.

In certain instances, the intelligence media indirectly guards against executive misconduct by selecting its audience. Furthermore, it demonstrates carelessness in meeting coverage requirements.

The board should assess the executive director's annual performance and provide measurable performance goals for the next evaluation period. If they are performing well, they should be acknowledged. However, they should also consider their control over accounting patterns.

When individuals are discovered to have insufficient public performances without supervision, it is the responsibility of the board to terminate them.

In order to create a government system grounded in policies and procedures: The authority to establish policies for the corporation rests solely with the board of managers. A policy is a rule that follows a standardized procedure for evaluating compliance. The regulations instituted by the board should be based on policy. In other words,

The board is responsible for developing policies that guide its own actions and the director's actions. These policies should be flexible and loosely defined to allow the board and director some freedom in achieving business goals. The board also establishes policies and procedures for governing itself and takes measures to ensure that board members are well-informed about the organization.

including its policies, civilization and norms, the profession, the higher instruction endeavor which it serves, and the functions.

The board has the responsibility of consolidating its duties and ensuring

public perception. It also ensures effective collaboration among its members and presents a unified image to the public.

Creating a Strategic Plan for the Organization

This task is typically completed during the organization's early stages or every five years.

The bureau's financial outlook is forecasted and expected through the development of a strategic program that intelligently predicts its programmatic elements.

The objective of this plan is to accomplish specific institutional and strategic goals over a span of five years.

To achieve the organization's goals, specific steps must be assigned to individuals or teams. It is crucial that these tasks are completed within the set timeframe. The board of managers usually comprises the executive manager and staff members.

Engaging stakeholders and assigning responsibility to staff for achieving success are key components of strategic planning. Advisors are frequently hired by boards to develop strategic plans, which serve as a means of communicating the bureau's needs to funders, clients, and other constituents.

When assessing the performance of the executive manager, the Board of Directors frequently relies on the strategic plan as a metric.

In fulfilling their fiduciary duty, ensuring accuracy in financial reports is paramount for the board.

The board of managers carries full responsibility for maintaining trustworthiness, transparency, and accuracy.

The company must handle its money properly from the start and the board must ensure that there is no fraudulent activity similar to what occurred in Enron, Worldcom, and Parmalat. This includes how the company deals with any financial issues and how the money is utilized.

How to protect the money from any misconduct and others. The boards are responsible for addressing the issue. The board is also responsible for ensuring that the company has enough money to

execute any plans agreed upon by the board.

Legal Requirements for Company's Board Directors

Generally, the purpose of law is to regulate human behavior and uphold everyone's rights. Malaysia also places importance on perfecting the law, such as providing laws on directors' responsibilities and enhancing the efficiency and effectiveness of legal requirements for business corporations in Malaysia.

In Malaysia, the growth and establishment of new companies are contributing to substantial changes in company law. The Companies Act 1965 plays a crucial role in ensuring compliance with legal requirements and enforcement in business operations. Therefore, any modifications to this law will greatly affect the country's business system.

The Companies (Amendment) Act 2007 (Act A1299), enacted on 15 August 2007, is commonly known as the revised version of the act. It introduces amendments, changes, and new provisions that are crucial for implementation in order to enhance efficiency and effectiveness in the business legal system.

There are many subdivisions under the Companies Act 1965 which focus on the role of the board of managers. One example is Section 132 of the Companies Act 1965.

It shows that the manager must always act honestly and use reasonable care in fulfilling his office responsibilities. However, this section has a minor weakness in Malaysian court practice because it lacks enthusiasm in using this provision as a guide to determine matters related to the director's responsibilities in terms of direct attention and skill.

Following the amendments, Act A1299 now states that a manager of the company must always use their power with proper intent and in good faith for the best interest of the company. Section 132 is now more restrictive in terms of the use of power, particularly

for managers. Previously, managers were only required to act honestly and diligently in their role, allowing them to use personal actions for their own benefit. However, under the new Section 132, this is no longer permitted.

However, the Act A1299 clarifies that a manager can only use their power for the benefit of the company, not for personal gain. This demonstrates an improvement in manager's jurisprudence. Additionally, a change in the Act A1299 is related to Section 132, which prohibits the 'use' of company assets.

The main point of this section is that managers should not misuse any information they have access to, for their own personal gain, whether it is direct or indirect, if it could harm the company. A change has been made because there is no specific or detailed reference to the taking advantage of any opportunities by the manager. It only mentions the misuse of information for a manager's personal use.

The reforming takes place with Act A1299, which replaces Section 132 with Section 132Act A1299. It states that the manager or officer of the company is prohibited from improperly using the company's belongings, any information, place, corporate chances or competing with the company.

In addition to that, the text highlights the requirement for a manager or officer of the company to obtain consent or confirmation from general meetings before using company assets. These changes emphasize that the restrictions on managers or officers have become more specific and detailed. These reforms enhance the legal obligations of businesses compared to the previous law, which was less comprehensive in addressing the prohibition against managers or officers using company assets without permission from the relevant authorities. Consequently,

According to

common jurisprudence, the general meeting has the ability to partially relieve managers of their fiducial responsibility, but there are limitations on this power. If the general meeting members unjustly interfere with a manager who is offended within the company, it can lead to unpredictable consequences that may harm the company, even if the new Act A1299 of Section (2) is in effect. Hence, caution should be exercised.

The legal authorities should have implemented measures to safeguard the company and its minority members. It must have been clarified that any confirmation or consent mentioned in Section 132 (2) would be considered invalid if it involved the votes of individuals who are under criminal influences or have personal motives detrimental to the company. In order to prevent fraud against the minority and the company itself, it is essential for the vote to take place during a general meeting. It is crucial that a resolution condemning misconduct is passed by impartial members who are not influenced by the perpetrators. Next.

Corporate concern agrees that Section 132 (1) should be amended, requiring managers to meet a minimal benchmark for their decision-making. The manager of the company must demonstrate sensible attention, accomplishment, and diligence with their knowledge and experience. Furthermore,

The managers also need to meet the requirement or standard as a manager, which is based on knowledge, skill, and experience. This new legal requirement of the core standard of manager is now being implemented. However, the process of evolution may be slow and take many years to develop.

According to the new provision of Section 132 (1E) Act 1299, it specifies that a manager, who was appointed by virtue of their position in

the company by the qualified authorities, must act in the best interest of the company. In case of any conflict regarding their duty and their obligation to their nominator, nominee managers, who are nominated by a majority shareholder, are also included in this provision.

Managers may find themselves in a difficult situation when balancing their responsibilities to the company and their obligations to their nominator. Therefore, they must figure out a way to prevent this struggle from occurring on a daily basis. Managers should wisely use their time to fulfill their role as a manager and be accountable for their work.

Managers also have rights and responsibilities when it comes to the delegation of their power, which is given to them by the board. Act A1299 modifies the original Act by adding a new section (1F) to Section 132. This new section states that a manager has the ability to delegate any board power to a committee, officer, employee, or any other person. It also states that the manager is accountable for the actions taken by those to whom they delegated their power.

However, the managers are still liable for any misconduct by the delegate despite their efforts to prevent it. According to the new provision under section (1G), managers are not held accountable under section (1F) if they have a reasonable belief that the delegate will use the delegated power in line with their managerial duties. Additionally,

Managers also have the responsibility to ensure that delegated tasks are effectively carried out, unless there are circumstances that may justify minimal supervision. These new provisions aim to promote efficient and organized business collaboration. Additionally, Section 131(1) of the previous Act

imposes a duty on every manager, whether directly or indirectly.

Should anyone be interested in entering into a contract or proposed contract with the company, it is imperative that they disclose their involvement during a meeting of the managers. Failure to comply with this requirement is considered a disrespectful offense and is punishable by imprisonment for seven years and a fine of RM150,000. However, to make up for this shortfall, a new section, (7A) and (7B), has been added.

The addition of Section 131 (7A) Act A1299 pertains to the inclusion of a manager's partner or child. This new provision clarifies that if the partner or child of a manager of the company invests in the company's shares or unsecured bonds, it will be considered as their involvement in a contract or proposed contract. Meanwhile, Section 131 (7B) Act A1299 explains the availability of civil redress. This new subdivision creates a favorable situation for the company, as it can choose to pursue a beneficial contract.

This new proviso also imposes restrictions on the company's ability to terminate the contract by incorporating a relevant exception. Section 131A of the Companies Act 1965 describes the voting and participation at a board meeting of a director who has a vested interest in a contract or contract proposal. Nevertheless, this exclusion is applicable.

The enhancement has been achieved through the addition of a new subdivision 131A to Act A1299. This new provision excludes an interested manager from voting and participating in board meetings. However, the interested manager is allowed to be present at the meeting but cannot engage in discussions or contribute to any agreements. The violation of Section 131A will result in

both civil and criminal penalties.

Last, Section 131B of the Companies Act provided an explanation of the map and power of the board. An amendment has been made to incorporate a new subdivision (1), which aims to legally acknowledge and enforce the commonly accepted regulations that the board's main role is to manage or oversee the company's operations. This new provision serves as a clear statement to the board regarding its responsibilities and provides a clear avenue for recourse in case of any issues relating to the board's duties. On the other hand.

The purpose of this new subdivision (2) is to recognize the board's authority to direct and oversee the company's affairs. It serves as a reminder to both the manager and foreigners that the powers of management can still be subject to changes, exclusions, or limitations outlined in the Act or the company's memoranda or articles of association.

Findings: Women and Board of Directors
Today, gender issues are prevalent in various sectors such as the economy, politics, and society.

Amusement, etc. Clearly, gender issues involving adult females have often been described as creating disadvantages rather than benefits. However, the reality is that adult females also possess numerous capabilities.

The following text aims to highlight the importance of accomplishments and strengths in contributing value to organizations. Additionally, it will explore the gender differences in leadership styles and the appointment of women as corporate board members.

The text discusses the benefits of having adult females on the board of managers, their capabilities, and the current issues regarding women's representation on corporate boards, using the example of the United Kingdom. It also explores the impact of women on corporate boards and addresses

the issue from a Malaysian Corporate Governance perspective.

Gender Differences and Board Tasks

Higher proportions of female managers on boards might have varying effects on different board responsibilities.

Board operational control undertakings involve the board's responsibility for overseeing managerial decisions such as investments, cash flow, dividends, and financial statements. These decisions pertain to the firm's financial and accounting situation, requiring a strong understanding of quantitative concepts and skills.

Strategic control, on the other hand, involves monitoring managerial decisions regarding company strategy and organizational practices and policies, including safety, health, and environment.

And as a result, it assumes more analytical and airy accomplishments, while operational control undertakings are more everyday and ex-post.

Ex-ante strategic control undertakings are more complex and innovative, requiring a broader range of perspectives. Previous studies indicate that women are particularly valued as board members because of their ability to provide strategic input and stimulate more productive discussions.

The productive discourse involves presenting different positions and points of view, which ultimately can result in generating more numerous options and improving the quality of decision-making regarding organizational strategies and practices. Additionally, the distinctive role of women on boards is often evident in their participative management style and greater sensitivity when compared to their male colleagues. This ability, along with women's focus on and consideration of others' needs.

Women may be inclined to actively participate in strategic issues related to the home and its stakeholders. As a result, women may have a heightened awareness of and ability to influence decisions regarding various organizational practices, such as corporate social responsibility and environmental politics.

It is possible to expect that boards with a higher ratio of adult females managers may be more effective

in executing strategic control undertakings due to their ability to lend well to such tasks.

Gender Differences in Leadership Style Group effectiveness theories propose that task nature plays a significant role in determining the relationship between team composition and effectiveness. This implies that a specific board composition may excel in one task but not in another, as these distinct sets of board tasks require different skills for optimal performance. Similarly, research on gender differences suggests that women may exhibit different behavior than men and be more effective in certain tasks compared to others. Applying gender-based differences in leadership theories to the context of gender diversity on corporate boards offers novel perspectives on the potential influence of gender diversity on board processes.

The text highlights the importance of understanding the differences in leadership behavior between men and women, specifically in terms of agentic and communal characteristics. These gender-based differences in leadership behavior have been extensively studied and are relevant to discussions of kinetics and task performance.

Work forces are often attributed with qualities such as being self-asserting, ambitious, aggressive, independent, and self-assured, more so than women.

Agents in a work setting may engage in daring and competitive behavior by speaking assertively and contending for attention.

Acting on others and providing problem-focused suggestions are communal features that are more prevalent in adult females than in males. These features primarily reflect a concern for the welfare of other individuals and a disposition towards being caring, helpful, and kind.

sympathetic, interpersonally sensitive, nurturing, and soft.

In work situations, communal behavior may involve speaking hesitantly, not drawing attention to oneself, accepting others' positions, and supporting and comforting others.

Research has found that female leaders are

more democratic and participative and less bossy and direct compared to male leaders. This contributes to the solution of relational and interpersonal jobs, as it promotes collaboration and inclusivity within a team.

On the one hand, they are less hierarchical, more concerted, and collaborative. They are also more oriented towards heightening the dignity of others. On the other hand,

societal scientists generally argue that in community settings, these differences are reduced. It is believed that women who choose the non-traditional profession of a director defy feminine stereotypes and possess needs, values, and leadership styles similar to men who pursue managerial careers. Following the structural interpretation of organizational behavior, scholars foresee that men and women in the same leadership position will behave similarly.

Despite arguments claiming that gender differences have minimal impact, some assert that these differences still play a role. This is evident in the slight variations in behavior between men and women in similar work roles within an organization. Therefore, gender disparities continue to exert some influence.

Previous research reviews show that while there are no overall differences in effectiveness between female and male leaders, there are some gender-related differences for certain behaviors and skills in certain situations. Therefore, these gender differences may not affect the overall effectiveness of the board but can impact the performance of specific board tasks.

Appointment of Woman as Corporate Board of Director

In recent decades.

Corporate administration and board of managers has become a topic of interest in the corporate world. Stakeholders are pressuring companies to improve their management skills and administration. The traditional methods of finding qualified board members are no longer sufficient. Nominating committees and search firms are expanding their search for qualified

managers and exploring new sources of candidates.

Nowadays, women in corporate administration contribute significantly to the development and changes in companies. They provide outstanding ideas, make good decisions, and support their employees. However, some companies still have processes and policies that only allow male managers to be board members, excluding adult females from these positions.

According to Zena Burgess and Phyllis Tharenou, in order to change the representation and position of women on company boards, companies need to make changes in their policy and procedures for hiring managers. They have also identified several strategies for companies to appoint women on boards.

Redefinition of the Pool of Eligible Managers

It is crucial to redefine the managers who are qualified and suitable for the role as company managers in order to ensure that the company can achieve the goals within the strategy set by top management to maximize shareholder value. Couples (2000) have argued for a change in the eligibility definition for appointments, allowing for women with other senior management experience to be considered, regardless of whether they already hold a board position.

Experienced women in management have a broad perspective on the company strategy, as they have the ability to efficiently solve problems, possess effective communication and critical thinking skills, and make informed decisions in a timely manner.

Companies' future and long-term goals involve having high engagement in profit-based activities. For example, the performance of the company demonstrates that turnover is more responsive to stock return performance in firms with a higher representation of women on their boards.

Then, Mattis (2000) also mentioned that expanding the candidate pool would provide increased opportunities.

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