Features governance of the company from board of directors

Abstract

This paper considers the features of corporate management on the part of board of directors. This paper includes consideration of efficiency of decision-making, the resolution of conflicts be-tween shareholders, realizations of investment in the company. In the presented work are considered mutual relations between board of directors and shareholders, from the point of view of accepting of effective decisions. The author analyzes one of tools of motivation for board of directors, namely stock options as incentives for company executives which effective decisions help to make. Realiza-tion of stock options in the Russian legal realities at times is an inconvenient task. Besides, principal causes of infringement are considered from controlling shareholder: imperfection of the national corporate legislation, an inefficiency of governance from board of directors. The author notices that the company management is capable using the management powers, effectively to manage the com-pany, in due time to inform shareholders on forthcoming strategic business decisions. Thereby, al-lowing diligent to expect shareholders injurious moods from, first of all, majority shareholders and to permit corporate conflicts. The permission agency problem is reached by means of optimization of structure of the capital of the company. Thereby, the permission of an agency problem (at least its mitigation), will allow board of directors to make more effective decisions and also to promote in-vestment realization in the company. Eventually investors build the policy with the company on fi-duciary bases, giving a priority of that which copes strong management.

Keywords

• shareholder
• conflict
• corporate control
• executive compensation
• board of directors