An effective corporate board underpins corporate governance Coursework

An effective corporate board underpins corporate governance. Critically discuss why this is so and what makes a board effectiv - Coursework Example Corporate sectors are therefore required to operate according to the rules and policies of the corporate governance for better growth as well as performance of transparent and responsible business functions. It also facilitates companies to conduct its business operations in accordance with the rules and the regulations prescribed under the companies act. Corporate governance offers specific guidelines on the basis of which policymakers and regulators ascertain that the policies and rules formulated are in compliance with legal provisions. Furthermore, it ensures that companies perform their business operations in an ethical manner (Fernando, 2009). Corporate governance ensures that a company is guiding its business activities in the right direction. In this regard, the BOD of companies are determined to be accountable for formulating appropriate strategies and policies in order to make sure that the company is operating ethically. It also seeks that the structure of the board is app ropriate, executives are properly compensated and shareholders are reported correctly. The principles as well as codes which are undertaken in the policy of corporate governance of companies accumulatively signify that companies are responsible for satisfying the requirements of its shareholders and stakeholders by a large extent (Tricker, 2012). Emphasising on these aspects, the study will intend to critically discuss about the importance of corporate governance in companies. The functions or operations of BOD of companies will also be discussed in order to ascertain that companies are conducting its business operations in an ethical manner. The important policies as well as codes will be further emphasized in this paper, which is the most significant aspect for corporate governance of companies. Due significance will also be rendered towards diversity as a crucial facet in the contemporary corporate governance frameworks. Significance of Corporate Board towards Corporate Governanc e Corporate governance of companies can be identified as largely dependent on the norms and functions of the BOD. The BOD of companies is recognised to be an important element as the participants or rather the board members are responsible for the formulation of policies as well as strategies for improved performance of companies and are also entitled develop or restructure the Articles Of Association (AOA) and Memorandum Of Association (MOA) for the company. These strategies, norms and policies are implemented with the intention of ascertaining that companies perform their business operations in adherence with legal policies, companies act and rules as well as regulations of the government. Business organisations are thus required to conduct its activities in accordance with the policies formulated by the BOD in order to ascertain that the planned business activities are performed ethically (Copnell, 2010; Ayuso & Argandona, 2007). Interest of Shareholders The key role of BOD is to act as a representative of the shareholders.