Board of directors

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I done this presentation during my master degree, year 2009.

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Board of directors

  1. 1. WHO ARE BOARD OF DIRECTORS?  It’s a body of elected or appointed members who jointly oversee the activities of a company or organization. The body sometimes has a different name, such as “Board of trustees”, “Board of governors”, “Board of managers”, or “Executive board”
  2. 2. WHY THE BOARD IS NEEDED?  The Board of Directors has important responsibilities to the shareholders of the company. The Board is responsible for the overall management and effective functioning of the bank. The banks, being a corporate entity, the Board of a bank is responsible to the shareholders.
  3. 3. WHO ARE ALL REPONSIBLE?  Banks being important participants in the payment systems, it is enjoined upon the Boards to safeguard the interests of the depositors and other stakeholders. The Board, however, cannot be expected to supervise the day-to-day operations of the bank and it, therefore, delegates and entrusts appropriate authority to the various functionaries, via  the whole -time directors of the Board such as, Chairman, Managing Director and Executive Directors. This makes each whole-time director, individually, and the Board, collectively, responsible for the performance of the bank.
  4. 4.  The general superintendence and direction of the affairs and business of the bank are entrusted to a central board of directors consisting of 20 directors, including:  A governor & 4 deputy governor  4 directors for each 4 local boards.  10 directors who are expert in business, industry, fin ance and co-operation  1 official nominated by the govt.
  5. 5. RBI BOARD OF DIRECTORS
  6. 6. Structure
  7. 7. MDM Bank  The Board of Directors principal goal has always been to represent the interests of the Bank’s shareholders and other stakeholders. It achieves this objective primarily by maintaining responsibility for the Bank’s overall strategy and overseeing mechanisms for supervision and control.  The agenda of every Board of Directors meeting and key decisions thereof are communicated to employees via various channels, ranging from Intranet announcements regarding operational decisions to face-to-face meetings and presentations about strategic decisions.
  8. 8. Major Duties of Board of Directors  Provide continuity for the organization  Select and appoint a chief executive  Govern the organization by broad policies and objectives,  Acquire sufficient resources for the organization's operations  Account to the public for the products and services of the organization and expenditures
  9. 9. Major Responsibilities of Board of Directors 1. Determine the Organization's Mission and Purpose 2. Select the Executive 3. Support the Executive and Review His or Her Performance 4. Ensure Effective Organizational Planning 5. Ensure Adequate Resources 6. Manage Resources Effectively 7. Determine and Monitor the Organization's Programs and Services 8. Enhance the Organization's Public Image 9. Serve as a Court of Appeal 10. Assess Its Own Performance
  10. 10. The Code is intended to provide guidance and help in recognizing and dealing with ethical issues and to help foster a culture of honesty and accountability. Every Director is expected to read and understand this Code and its application to the performance of his or her duties, functions and responsibilities.
  11. 11.  (i) Represent the interests of the shareholders of the Company;  (ii) exhibit high standards of integrity, commitment and independence of thought and judgement;  (iii) dedicate adequate time, energy and attention to ensure the diligent performance of his/her duties including make all reasonable efforts to attend Board or committee meetings;  (iv) comply with every provision of this Code; and  (v) ensure that all employees shall be treated with equal respect and dignity and shall be provided with equal opportunity to develop themselves and their career
  12. 12.  COMPLIANCE OFFICER  COMPLIANCE WITH APPLICABLE LAWS  CONFLICTS OF INTEREST  CORPORATE OPPORTUNITY  CONFIDENTIALITY  FAIR DEALING  PROTECTION AND PROPER USE OF COMPANY ASSETS  REPORTING ANY ILLEGAL OR UNETHICAL BEHAVIOUR  PUBLIC COMPANY REPORTING  AMENDMENT, MODIFICATION AND WAIVER
  13. 13. DOS  Discipline & Involvement  Constructive & Development Role  Business Specific Contribution DON’TS  Non-Interference  No Sponsorship  Confidentiality
  14. 14. Banking Regulation Act 1949 • The banking laws (amendment) act,1968 inserted new provisions under sections 10A,B,C and D regarding the constitution of the board of directors Appointment of the chairman
  15. 15. Constitution of the board of directors • Sec 10A- eligibility of person who may appointed as directors. Every company is required to constitute its board of directors in such a way that not less than 51% of the total number of members of the board shall consist of persons who satisfy the following two conditions: ▫ Having special knowledge ▫ Do not have substantial interest
  16. 16. • The BOD shall reconstitute the board to ensure the above requirements are fulfilled. • Acc to sec 2A, inserted in 1983, the director of the company shall not hold the office for a period of exceeding 8 years • And if the chairman or whole time director is removed or cease to be a director .he is not eligible to re-appointed as a director of such banking for a period of 4 year. • Prohibition of common directors-section 16
  17. 17. Appointment of chairman • Section 10B provided one of its directors as the chairman of the board of directors who shall entrusted with the management. • The chairman is required to be in the whole time employment of the banking company • He shall not hold the office for a period not exceeding 5 years as the board may fix, he shall be eligible for re-election or re-appointment.
  18. 18. • Sub-section 4 prescribed that the chairman shall be a person who having special knowledge and practical experience of the working of a banking company or the SBI or its subsidiaries of a banking company etc… • The election or appointment of chairman must be to the satisfaction of the RBI. • Section 15A or 15 B not required to hold qualification shares.
  19. 19. • Section 10C and 10D prohibits any person removed by under the above sections from the claiming any compensation for loss or termination of office.
  20. 20. RBI control over top management of banks • Section 12A - to call a general meeting of the shareholders • section 35B - to take prior approval for appointment • Section 36AA – to remove the top management personnel • Section 36AA(6) - to appoint a suitable person for the removed place by RBI • Section 36AB – appoint one or more additional directors • Section 36AC - sec.36AA and 36AB shall not effect or contrary conduct contained in the companies act or other law for the time being
  21. 21.  The Group is of the view that the existing level of remuneration paid (by way of sitting fees, etc.) to directors of banks and financial institutions is grossly inadequate, by contemporary standards, to attract qualified professional people to their Boards, and expect them to discharge their duties as per the mutually agreed covenants.  A few of the banks / FIs have modified their compensation plans to include a base salary, performance bonus and options to their directors. In order to get quality professional people, the level of remuneration payable to the directors should be commensurate with the time required to be devoted to the bank's work and also to signal the appropriateness of remuneration to the quality of inputs expected from a member.  The remuneration of the directors may also include the form of stock option.
  22. 22.  Sec 11contains 2/3rd of directors appointed by central government. ◦ Chairman & managing director (by govt.) ◦ 2 executive directors(by govt.) ◦ Representative of employees of the bank (by govt.) ◦ 5other directors representing various sector of the economy (by govt.) ◦ 3 directors appt by shareholder at annual general meeting.
  23. 23. Union bank of india (board)  Chairman & Managing Director  SHRI M.V.NAIR  Executive Director  SHRI T.Y. PRABHU  SHRI S.Raman  Government of India Nominee  SHRI K.V. EAPEN  Government of India nominee on the recommendation of RBI.  SHRI K. SIVARAMAN  Chartered Accountant Director  K.S. SREENIVASAN  Director representing Workmen Employees  WORKMEN DIRECTOR  Director representing Officer Employees DEBASIS GHOSH  Government Nominee Director under General Category SMT. RANI SATISH  Government Nominee Director under General Category  SHRI ASHOK SINGH  Part-time non-official Director  Dr. Gulfam Mujibi  Shareholder Director PROF. M.S. SRIRAM Shri Arun Kumar Nanda Shri.S. Ravi

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