Page 125 - SBL Integrated Workbook STUDENT 2018
P. 125
The board of directors
2.6 Chairman and CEO
'A clear division of responsibilities must exist at the head of the
company. No individual should have unfettered power of decision.'
2.7 Chairman’s responsibilities
To ensure that the board sets and implements the company’s direction and
strategy effectively.
To act as the company’s lead representative, explaining aims and policies to the
shareholders.
2.8 CEO's responsibilities
To take responsibility for the performance of the company, as determined by the
board’s strategy.
To report to the chairman and/or board of directors.
2.9 Reasons for splitting the role
Representation: the chairman is clearly and solely a representative of
shareholders with no conflict of interest.
Accountability: provides a clear path of accountability for the CEO and the
management team.
Temptation: reduces the temptation to act more in self-interest rather than
purely in the interest of shareholders.
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