BMA lesson 6.a

 

 BOARD OF DIRECTORS 

The board of directors is a group of company directors who are charged with the task of fulfilling a vision for a company or any organization. They include the managing director from top management, executive directors from middle management, plus other non-executive directors who do not have full - time duties to play at the organization, but offer their services to the company on a part - time ground. 

THE CHAIRMAN

The Chairman is the person with the highest authority on the board level. He is responsible to hold meetings with all the directors of the company. 

The chairman, in most cases, happens to be one of the owners of the company with more knowledge about the company than any other person. He is fit to chair every meeting and is informed by his directors concerning the performance of the company. He represents the shareholders.

THE MANAGING DIRECTOR

The managing director is the second most powerful Person after the chairman and shareholders. 

He is the one the owner(s) entrust with him, the running of the company. This implies that all major decisions, plans, policies and their achievements on the administrative level are left in his hands. 

Due to this huge responsibilities, he is assisted by other executive directors and non executive directors , who form the body of administration, so that they can together fulfil the vision for the shareholders ( management).

THE EXECUTIVE DIRECTORS

The executive directors are mostly the administrative heads of departments who also have boardroom status. As representatives for their departments, they appear on the board to present feedbacks, challenges and suggest ways to handle these outcomes. They play little decisive role during board meeting. 

The word executive means, full time duty. As full time workers, these directors will be seen at their respective departments, leading and controlling the supervisors below them to directly enforce work progress on the workforce.

NON - EXECUTIVE DIRECTORS

Apart from the executive directors who work directly with top management, there is another group of directors who do not work directly with the managing director or the chief executive officer, but bring on board, their knowledge, when it is required. These are the non-executive directors who are not found daily with the company. Their presence is seen during board meetings.

Another way in which the organizational heads come together to deliberate on company issues, apart from a board meeting, is the meeting which takes place at the end of every trading year. This is called the annual general meeting(AGM), which brings together all the shareholders of the company and the directors so that profit for the company owners, called dividend, can be read out to them, as a way of saying thank you for allowing their investments to work for the company.

Generally, board of directors will play two roles for a company. They include a management role (usually seen with the shareholders), and an administrative role - which are left for the managing director, executive directors and non executive directors.

 Directors are seen as those people who are legally appointed to run the affairs of a company on behalf of the shareholders (owners of the business).

FUNCTIONS OF THE BOARD OF DIRECTORS

Let us finally take a look at the few duties by the board of directors.

▪ They are responsible for managing the day to day operations of the firm.

▪ They are responsible for the expansion and continuity of growth, in terms of workforce, liquid assets and capital assets.

▪ They are entrusted to make profits for the company (both the shareholders and workforce).

▪ They make relevant decisions for major purchases of materials like assets (properties, cars machines) for company.

▪ They ensure compliance of the law with stakeholders 

(outsiders) and with the internal workforce (insiders).

▪ They demonstrate good leadership for the firm and also to the outside world.

In conclusion, when it is mentioned of the role of the board as management, it must be seen as the management part of the company, whereas when the role administration is asked of as role of the board, it must be seen as the administrative duties of a company.

BMA lesson 5

 An Organization and its structure

One of the most important duties of every management body is to create a structure that helps them to run the organization successfully. 

The term organization is can be defined as an entity, a group or people or a union of association created to establish a common goal. In business enterprises, we call it business organization. Hence, whenever we see organization being used in this course, we mean a business type.

Secondly,o structure is a system of leadership created to regulate the affairs of the people. It functions from with powers from the top to the lowest part of the organization. 

The structure is designed to give the most powerful or key leaders in the organization to have powers given to them to control those under them.

In any typical organization, management creates the structure and represents it in the form of a chart to allow people to see  how their leadership works in the organization.

An organizational chart can also be called organogram. In a typical organizational chart, there is usually arrows moving from the top to the bottom. Some arrows too move sideways.

All arrows pointing from the top represent  authorities given to the top people at management level to work over their subordinates  under them ( administration ).

Any arrow moving in sideways represents a help or assistance from one department to another on the same level ( only administration ). 

Within an organizational chart, we also have the number of people who are asigned to work under a leader. We call this the span of control. If a manager for a department has three people working under him, for example, we can conclude that the span of control of the manager is 3, meaning, he controls three workforce. 

To be able to draw an organogram and to represent it well for authority flow, a student must under the types of authority found within an organization. Authority will be treated in the following topics.