50904989 Bio-business

Board of Directors- The management of the company

Introduction

A company, firm, corporation or an enterprise is a legally established organization which comprises of people united to offer services to consumer and make profit. A company could be of a private owner or could be government owned. Most of the companies are created to make money gain, which is then used for the growth of the firm. Company has its own assets and liabilities and company’s assets are not the property of its shareholders. The persons with whom the responsibility of working and management of a company lies are called as board of directors. All though share holders own the limited part of the company they cannot run it, part of running the company is given to directors. Board of directors is the highest authority in the organization of the company. Board of directors comprises of people who are responsible for the legal actions, signing documents, taking decisions for the company’s acquisition or merger with another company, analyzes company’s financial report and decides on dividends.

Role of board of director

Ideal roles which a director is expected to play are self responsibility, professional development and competence, obligations towards clients and obligations towards society. Toward company they are expected to look after the employees, safety of the company, laws to be complied and taxation levied on the company (Startup Hire,2009).

Directors study and sanction hierarchy of organizational and controls of the members. They ensure that management is qualified and capable. They analyze and study the corporate plans and strategies and suggest necessary changes (Startup Hire, 2009). They analyze and formulate the policies of the company. They provide an unbiased view on the working and controls of the company. They keep an eye on the company’s business plans and the progress. They analyze and implement corporate policies within the company (Startup Hire,2009). They keep track on the working of the company on daily basis to ensure that company meets its targets.

A company cannot function on its own so it requires people who can act on its behalf such as directors. Directors only perform their duties for the company and they don’t personally are responsible for the company’s contracts. In adverse situations directors also play the role of employees to get good management(Startup Hire,2009). Directors give orders and see that they are executed effectively and hence act as officers. They act as trustees of company’s finance, infrastructure and power are in their hands and they use powers in the benefit of the company and not for their own benefit. Directors have the responsibility to look after the day to day affairs of the company as they have the power of being the highest authority in the policy and decision making steps of the company(Startup Hire,2009).

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Commonly it is found that the board of directors has the primary goal to safeguard the assets of the investors and shareholders and to make certain that they get a good return of their investment. Some directors believe in their employees and feel that they prime responsibility is towards their employees.

Corporate structure

Number of board of directors depends upon the size of the company. Small companies have 1 director in their board while large companies can have 10 or more board of directors.

Types of board of directors

Rotational Directors Permanent Directors Special Directors Executive Directors Non-executive Directors

Types of corporate officers

CEO or President Chief Operations Officer Chief financial officer or Treasurer Secretary

Shareholders

Shareholders are the owners of the company as they have invested in the company and holds share of the company. They could be a few in numbers to many. Major actions of the company, whether in transaction of money or change in policy of the company requires the consent of the shareholders (Find law, 2009).

Structure of board of director

Some directors are permanent while others are temporary or rotational directors. Shareholders elect the rotational directors.

Members of the board include Chairman, CEO, Non-executive directors, CSO.

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Typical organizational chart of a normal company (design intelligence,1998)

Responsibilities of board of directors

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Ideal responsibilities of board of directors (design intelligence,1998)

Role of Chairman

Chairman’s main role is leading the board of the company. He functions to see that board is operative, sets achievable targets, make a strategy and implement them so that targets are achieved. Chairman is elected by the board of directors and depending on the size and financial status of the company, a chairman could be part-time or full time and in small company chairman had to take an additional role of managing direction (Iod, 2006).

- Represents before the market the strategy and plans of the company.- Have power of board development by maintaining the balance in the board by ensuring

variation in age, experience and personality.- Ensures the participation of all the members of the board in meeting to reach a decision - Looks over the election of the directors in board- Ensures that members of the board get appropriate information so that all members are

focused and reaches a consensus on issue being discussed.

Role of CEO

CEO is the head of corporate part of the company. CEO is the executive authority and works as link between the board of directors and the corporate part of the company (CFO, COO and CSO) (design intelligence, 1998). The CEO analyzes the opportunities and problems of the company and

Role of board of directors

Visionary (focus on purpose)

Search of purpose (focus on learning)

Individual courage, compassion and

support (focus on legitimacy)

Values and beliefs (focus on Propiety)

Endurance (focus on outcomes)

Enabler (focus on process)

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initiates the ways to handle them. All major actions require the consent of the CEO for which he is responsible (design intelligence, 1998).

CEO functions as a link between the company and the board as well as with the public. He acts as spokesperson of the company and negotiator of the company (design intelligence, 1998). CEO should have information of the company which helps in proper disposition of his powers. CEO designs the strategy and plans for the company. CEO’s maintains the pace of the work and decides the workload. They interrupt when work is lagging behind the schedule (design intelligence, 1998). CEO attends meetings, press conferences and act as communicator between company and the media. CEO gives strong emphasis on particular activities and current work in the company and pays little or no attention to daily operation, general discussions. As CEO has a lot of pressure from board as well as employees, he cannot get into depth of every matter neither he can read about everything so he prefer to converse with the related people and passes on the information to the respective persons as CEO is the person who receives information from all the departments (design intelligence, 1998).

Role of Non-executive director (independent director)

An Independent director is a non-executive director of the company. They are elected as part-time members to help the company with their intelligence and experience. They attend the board meetings and keep a close eye on the company’s functions so that they are aware of the company and can provide precise and analytical views. They play important role in building the action plan for the company, study the performance of the company, they review the financial statement. They analyze the legal affairs of the company and measure taken to improve company’s image. They are in constant touch with shareholders of the company. Their view is very important as they are impartial in their views and have no attachment to the company and can provide advice from the consumer point of view(design intelligence,1998).

Role of CSO

Chief Scientific Officer plays a critical role in leading the research and development and directs research to develop new technologies in research focused company. CSO jointly with Business director shares the risk of commercialization the end product of the research (design intelligence, 1998). One of the crucial area which concerns CSO is clinical trials to show the efficacy of the drug or effectiveness of the product. CSO formulates the clinical development strategy along with CEO and scientific advisory board (design intelligence,1998).

- Ensures functional, medical and scientific guidance in developing groundbreaking clinical strategy.

- Creates a publication strategy for research to be published.- Recognizes present and future market based on healthcare areas.- Interacts with the eminent persons in the respective area and getting their opinion on the

clinical studies.

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- Delivers results and findings of the research and clinical study by lectures, seminars, meetings and symposiums.

- Involved in review of clinical studies, statistical analysis, drafting and editing protocols and manuscripts

- Ensures the adequate representation of the product and information related with it to the healthcare authorities like MHRA, FDA and EMEA.

Conclusion

After digging in the corporate culture of a company through this assignment it became clear that the key for the success of a company is not its CEO or Chairman but the collective efforts put by each one of them. Since the hierarchy of the company is designed in a form of a chain so each one individual contributes and work along with the other. Even if the productivity of one person goes down it affects the overall performance.

Board of directors, Chairman and other executive members work in synchrony with each other. Important things in the company are good culture and respect for all. CEO play an important role in building strong cultural values and respect among the employees as CEO sits at the highest managerial level.

Lastly, a firm by itself offers a lot of training and develops its employees in terms of ethics, cultureand values depending upon the example set by the CEO and chairman.

References:

Bioentrepreneur from bench to boardroom [available online] http://www.nature.com/bioent/building/planning/012003/pf/nbt0598supp_41_pf.html [accessed on 25th march 2010]

Design intelligence,1998 [available online] http://www.di.net/articles/archive/1985/ [accessed on 25th march 2010]

Find law, 2009 [available online] http://smallbusiness.findlaw.com/business-structures/corporations/corporations-structure.html [accessed on 25th march 2010]

IOD,2006 [available online] http://www.iod.com/corporategovernance/ [accessed on 25th march 2010]

Practical business advising [available online] http://www.businesslink.gov.uk/bdotg/action/layer?topicId=1073870537 [accessed on 25th

marc 2010] Startup hire , 2010 [available online] http://www.startuphire.com/job/chief-scientific-officer-

waltham-ma-85822 [accessed on 25th march 2010]