Board of Directors : Theory and Practice in Dairy Cooperatives

1993 ◽  
Vol 18 (4) ◽  
pp. 21-28
Author(s):  
Ajit Kanitkar ◽  
N V Belavadi
Keyword(s):  
Board Of Directors ◽  
Theory And Practice ◽  
Critical Difference ◽  
Strategic Issues ◽  
Corporate Organization ◽  
The Board Of Directors ◽  
Day To Day Operations ◽  
Dairy Cooperatives ◽  
Cooperative Organization

Theoretically, the Board of Directors (BOD) of organizations belonging to corporate as well as cooperative sectors is expected to have a long-term, strategic focus. However, a critical difference between the BOD of a corporate organization and a cooperative organization is that the latter is constituted by user-members and are, therefore, expected to truly reflect user-owners' commitment to the organization. Against this backdrop, this paper by Ajit Kanitkar and N V Belavadi examines the dominant concerns of the BOD of cooperative sector organizations by analysing the agenda-items of Board meetings of federated dairy cooperatives. According to the authors, the BOD in this sector is more concerned with day-to-day operations than strategic issues.

scholarly journals Characteristics of the board of directors and involvement in innovation activities: A cognitive perspective

2009 ◽  
Vol 5 (3) ◽  
pp. 34-44 ◽  
Author(s):  
Jamel Chouaibi ◽  
Younes Boujelbene ◽  
Habib Affes
Keyword(s):  
Board Of Directors ◽  
Negative Impact ◽  
Firm Level ◽  
Cognitive Perspective ◽  
Innovation Activities ◽  
Inside Directors ◽  
The Board Of Directors ◽  
Innovation Policies

This article focuses on the relationship between the characteristics of the board of directors and the innovation policies in the Tunisian context from a cognitive perspective of corporate governance. The method used in this study is based on the regression analysis. We directly regress the board of directors’ characteristics with the firm level of innovation. Our model includes some control variables such as the firm’s size, the firm’s sector of activity and even whether firm is listed or not. We empirically demonstrate that only the inside directors and the duality of the CEO are positively and significantly associated with the firm’s level of innovation. Moreover, the empirical results show that the big size of the board has a negative impact on the development of innovative firms. In the same way, we demonstrate that the compensation system which is based on long-term objectives has no influence on the determination of the innovation policies in Tunisian firms.

scholarly journals Die funksies van die raad van beheer: Teorie en praktyk

1983 ◽  
Vol 14 (1) ◽  
pp. 1-5
Author(s):  
Chris F. Van Veijeren
Keyword(s):  
Board Of Directors ◽  
Theory And Practice ◽  
Strategy Formulation ◽  
The Board Of Directors

The functions of the board of directors: Theory and practice A major difference seems to occur in practice between what the normally accepted functions of the board of directors are and what they actually do. As the ultimate body responsible for managing an organization, one would normatively expect them to set amongst other functions the strategy of the organization. Lack of detailed involvement, time and sometimes knowledge prevent them from actually doing so and it is argued that as far as strategy formulation is concerned, the board should perform an audit function to ensure that strategies are rationally set.

The activity center accounts were debited with all indirect charges (wages and sundries). They were credited with the sums appor­ tioned to each type of production. As regards the “work of the machinery” account, the key for sharing the charges among all products is indicated: " . . . the sharing of expenses will be made up to the power consumed in each workshop.” As regards “over­ heads”, they were shared “proportionally to the direct labor with which every manufacturing account was debited." Some of these accounts were credited with the products of subsidiary activities; for example, the "work of carriages and horses" account was to be credited. As a contra, a debit to the warehouse account was re­ corded for the “dung produced." Don’t be wasteful! THE IMPORTANCE OF DEPRECIATION At Saint-Gobain, depreciation methods barely evolved be­ tween 1830 and 1872. From that date, the Directors paid new attention to the problem.13 There were essentially two reasons for this: on the one hand, the Directors recognized the necessity of investing more and more in machinery, and, on the other hand, they were bound to respect their “no long-term debts" policy. The Company had to preserve the sums of money that were essential for its growth, but it was quite impossible to say this bluntly to shareholders who were numerous and not well aware of manage­ ment matters. Until then, the Company made a distinction be­ tween ordinary depreciation, “calculated according to steady rules", and extraordinary depreciation, “determined by the Board of Directors according to the profit and rectifying the slow progress of the ordinary depreciation as regards the value of some items”. Further on, the record shows the directors' concern that "the only drawback of the system is its arbitrary aspect; the share­ holders argue that to accuse the Board of Directors of deciding the dividend according to their desires and not to the year's profits.” At this time, there was no radical changes of the depreciation method. There is just evidence of greater scrutiny in valuing the assets, and more concern for keeping the shareholders acquainted with the management of the Company and the problems manage­ ment faced. Nevertheless, as a result of that discussion, the Board of Directors had to deal with many problems linked to the effi­ ciency of an accounting information system: precise methods for the valuation of fixed assets, definition of the quality and quantity

2014 ◽  
pp. 266-266
Keyword(s):  
Board Of Directors ◽  
The Other ◽  
Accounting Information System ◽  
Fixed Assets ◽  
The Board Of Directors ◽  
Slow Progress ◽  
Activity Center ◽  
The One ◽  
Definition Of

Whose side are you on?

2017 ◽  
Author(s):  
Graeme Guthrie
Keyword(s):  
Board Of Directors ◽  
Bargaining Power ◽  
Fiduciary Duty ◽  
Senior Executives ◽  
Short Term ◽  
Strong Ties ◽  
Governance Practices ◽  
The Board Of Directors ◽  
Lock In

The board of directors has a fiduciary duty to the shareholders who elect its members to monitor, advise, and if necessary replace the CEO and other senior executives. One way to analyze the interactions between boards and executives is as an ongoing series of bargaining games. Strong ties can develop between directors and executives, which affect the bargaining power of the various participants. Short-term changes in bargaining power can lead to negotiated changes in board composition that lock in the altered bargaining power for the long term. This chapter uses Ray Irani’s tenure as CEO of Occidental Petroleum to describe the bargaining game interpretation of board-CEO interactions and to demonstrate how this framework can explain many observed corporate governance practices.

University of Virginia Health System: The Long-Term Acute Care Hospital Project

2017 ◽  
pp. 1-10
Author(s):  
Kenneth M. Eades ◽  
Nili Mehta
Keyword(s):  
Health System ◽  
Board Of Directors ◽  
Acute Care ◽  
Cash Flow ◽  
Flow Analysis ◽  
Acute Care Hospital ◽  
Base Case ◽  
Care Hospital ◽  
The Board Of Directors

This case is best taught in a first-year MBA finance course and with a series of cases based on cash flow analysis. Its primary objective is to portray the major differences in project analysis for nonprofit organizations compared to for-profit companies and to highlight the unique issues relevant in a health care environment. Students must decide, based on cash flow analysis and nonfinancial factors, whether or not to propose a long-term acute care hospital (LTAC) project to the board of directors of the U. Va. Health System. Students must use the assumptions outlined in the case to create a cash flow analysis and then compute a net present value (NPV) calculation and internal rate of return (IRR) for the project. After assessing the base-case results and sensitivity analysis of the assumptions driving those results, students must decide if the project should be taken to the board of directors.

scholarly journals Financial Crisis Of A Health Clinic: A Case Study

2011 ◽  
Vol 6 (3) ◽  
Author(s):  
Morris D. Long
Keyword(s):  
Financial Crisis ◽  
Patient Care ◽  
Board Of Directors ◽  
Health Clinic ◽  
Small Community ◽  
Non Profit ◽  
The Board Of Directors ◽  
Health Organization

The Northern Indiana Health Clinic (NIHC) is a small community, non-profit health organization located in northern Indiana. Over the last 18 months, local factories have downsized or closed their doors, residents have left the community, and the number of uninsured individuals has continued to escalate. NIHC is not immune to the economic misfortune and closed out last year with its first operating loss in the last three years. The outlook for the coming year looks even more dismal and places NIHC in financial jeopardy.  The CEO has presented a number of recommendations to the board of directors for consideration. The board hired a consulting company to analyze the CEO’s proposal and provide long-term solutions that will turn around the current financial direction without sacrificing patient care.  

scholarly journals An information technology and innovation committee to guide digital transformations

2021 ◽  
Vol 17 (2) ◽  
pp. 38-53
Author(s):  
Erik Beulen ◽  
Ries Bode
Keyword(s):  
Information Technology ◽  
Corporate Governance ◽  
Board Of Directors ◽  
Value Creation ◽  
Audit Committee ◽  
Design Science ◽  
Technology And Innovation ◽  
Governance Challenges ◽  
The Board Of Directors

In corporate governance, more dedicated attention to digital transformations is becoming essential. This research applies design science to design an information technology and innovation (IT&I) committee as an integral part of corporate governance for organisations that are engaging in digital transformations. This research builds on the work of Turel and Bart (2014). In our research, we conclude that the seven Dutch studied organisations, which are engaging in digital transformations, have corporate governance challenges for the board of directors related to these transformations. These challenges include the presence of digital capabilities and experience, as well as having sufficient dedication and focus on digital transformation. In most organizations, the audit committee addresses the risks associated with information technology including digital transformations. However, our research shows that the audit committee by default does not focus on business opportunities of digital transformations. Our research proposes a design for an IT&I committee, which enhances corporate governance, as well as the long-term value creation by means of IT, technology, and innovation. The IT&I committee councils and monitors digital transformations and facilitates decision-making by the board of directors. Overall, the results of our research suggest that installing an IT&I committee improves corporate governance for organisations that are engaging in digital transformations.

scholarly journals Sunbeam Corporation: A Forensic Analysis

2011 ◽  
Vol 6 (1) ◽  
Author(s):  
Patricia Hatfield ◽  
Shelly Webb
Keyword(s):  
Board Of Directors ◽  
Forensic Analysis ◽  
Board Members ◽  
Chief Financial Officer ◽  
Full Support ◽  
Cost Cutting ◽  
The Board Of Directors

The members of the Board of Directors at Sunbeam were completely bewildered. Al Dunlap, Sunbeam’s highly successful but controversial CEO was threatening to resign after almost two years of leading Sunbeam successfully out of  a slump that had threatened the long-term viability of the company. Al Dunlap didn’t mince words. He angrily told the board, “We can’t fight a battle on two fronts. Either we get the support we should have or Russ [chief financial officer] and I are prepared to go…Just pay us.”1 The directors had always stood solidly behind their hardnosed, cost-cutting leader and had been rewarded handsomely for their allegiance. The directors were taken aback. Why would they stop now? What was going on? Was it possible that one of the lead investors had conspired against the success of Sunbeam? A sense of panic set in but the board members assured Al Dunlap that he had their full support.

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