A company is like a person. It has an identity, name and the right to do what it was established to do. Each company has a specific role which comes with a set of tools. Similarily, for a person too, a set of skills like the use of English Language and good communication skills can be beneficial to any working professional. It has duties and obligations set out bylaw. It can be dissolved if desired. In fact, a company is also referred to as an artificial juridical entity.
The Inner Workings of a Company
To establish a company, certain conditions have to be met. It must have a purpose for its existence. This is defined in a document known as the Memorandum of Association. The company must also describe the way it will conduct itself. The rules and bylaws covering a company’s operations are laid out in the Articles of Association. These documents are available for anybody who wishes to refer to them. In this way, people or firms or other companies dealing with a company are able to make themselves familiar with the intentions and methods of that company.
Generally, a company needs to have a minimum of 2 shareholders. This number is higher for companies that are considered ‘public’. Since shareholders who contribute capital to the company may not be in a position to manage it, the law requires every company to form a Board of Directors with a minimum number of members. Again, there are various stipulations regarding the size and composition of the Board for companies of different kinds to ensure adequate and fair representation of shareholder interests. The Directors are typically elected to the Board by the shareholders.
Different Roles to Understand
A Director’s role is to be aware of the business of the company. In addition, Directors must understand their role on the Board. The Board is the custodian of shareholder interests. Besides, many others rely on the Board to assure themselves about the goings on within a company.
Directors must ensure that meetings are held regularly. They must insist the agenda for the Board Meeting is shared in advance. This allows them to prepare for the meeting. If necessary, they can request for inclusion of certain agenda items. The Directors must ensure they get a full picture of the state of affairs.
What Happens at a Board Meeting
Typically, at a Board Meeting there are certain standard and statutory items that have to be covered. It is usual practice to review previous meeting minutes to confirm an accurate record of discussions and decisions is maintained. Meetings are generally held once every quarter and topics are tabled as relevant. For example, the Board must approve any financial information published by the company. Quite often, the Board appoints sub committees to review certain matters in depth. Thus, it is not unusual to find sub committees for Audit and Compliance or for Human Resources and Compensation. The CEO of the company should provide an update on business at each meeting.
Boards that are effective tend to encourage certain practices. A popular approach is to invite senior executives of the company to the meetings. This allows for face to face interaction and is very useful for the Directors as well as the executives. Directors of companies that are spread across locations recommend rotating the meeting venue to enable them to get a first-hand feel for operations.
A Director is a trustee. She or he has an important responsibility. They must ensure there is no conflict between their role as a member of the Board and any other business or activity. In such a case they must ensure full disclosure and ensure they are not involved in the related discussions or decisions.
Companies are increasingly making significant economic impact. With the break-down of social and political barriers, corporate structures are spanning countries and becoming very complex. The role of the Board is very important to safeguard the interest of stakeholders.
The Advantages of the English Language
It is obvious from the above that accurate and regular communication is critical for the Directors and the Board to perform their duties. Often, in these days of globalisation, the Board may consist of members from different geographies and cultures. The English language is the most accepted medium of communication. Thus, learning to speak English or working to improve spoken English and writing ability is becoming increasingly important. Remember if you are a Director on the Board of a company, your ability to comprehend information and analysis accurately can make a difference to the fortunes and future of the business. Therefore, the English language can actually help you lead and communicate more efficiently.