Effective Boardroom Dynamics and Governance- My Contribution.

GHANA INSTITUTE OF MANAGEMENT AND PUBLIC ADMINISTRATION - GIMPA

CITY CAMPUS- EVENING MBA

GMBA 604: BUSINESS ENVIRONMENT [LEGAL]

LECTURER: MR. DERICK OHEMENG-MENSAH

END OF FIRST SEMESTER ASSIGNMENT

BY

GEORGE ASARE BEDIAKO

INDEX NUMBER: MBAE 11050104

26TH DECEMBER, 2012

INTRODUCTION

In theory, shareholders own and control companies but in practice and as is seen all over the world, it is the Directors and Executives and other professionals who have been vested with power by the shareholders to run these companies on their behalf who exercise the corporate power and authority. This is possible because shareholders abdicate their responsibilities to these paid officials by reason of lack of time, non attendance at shareholders meetings, inertia, lack of knowledge and money. As such these paid officials become ‘a law’ unto themselves as they subtly and overtly wrestle power from the shareholders.

In recent years, debate has intensified regarding the accountability of large public companies.

The question of accountability has arisen in both the internal context of the company, i.e. whether shareholders exercise sufficient power to control companies, and in a context external to the company, namely the ability of governments and/or appropriate transnational organizations to control corporate

activities. Allied to questions of accountability and control is the issue of in whose interests the company should be managed and controlled. Should the interests of shareholders be the sole concern of corporate boards, or should companies and directors owe duties to interests wider than shareholders, such as employees, customers, consumers and the public in general?

The companies Code 1963 (Act 179) sets out that the company is a separate entity from the shareholders and people who run the business on their behalf. The relationship that exists between the principal (company) and the directors of companies is known...