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A Presentation by: -

Shivani Vohra

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á ëefinition
d Organization may be defined as a collection of individuals working together in a
division of labor to achieve a common goal.
d It is a social arrangement which pursues collective goals, controls its own
performance, and has a boundary separating it from its environment.

á Structure - Formal and Informal Structure


d Informal ² Or a Shadow Structure, that exists apart from the formal organization and
which results from personal interactions, sentiments, and social activities.
d Formal ² A structure that stipulates the way the organization is supposed to function.
This is documented in the form of a chart, which typically denotes the following
information:
The ëivision Of Work Among The Workers
The Type Of Work Performed
Superior-subordinate Relationships
Communication Channels
Sub-unit Groups Or Components
The Level Of Management
       

A Hierarchical representation
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á ëefinition
d A Board of ëirectors is a body of elected or appointed members who jointly oversee the activities
of a company or organization. The body sometimes has a different name, such as board of
trustees, board of governors, board of managers, or executive board. It is often simply referred to
as ´The Board." The Board is the top administrative organ of the company. The ëirectors have
collective responsibility and they take decisions by means of majority principles. The ëirectors act
as agents, trustees and managing partners of the company.

á Role
d Trusteeship Function
d Formulation Of Policies And Programmes
d Appointment Of Executives And Other Personnel
d Approval Of Budgetary Estimates
d Evaluation Of Performance Of Executives
d ëelegation Of Powers And Authority
d Proposal And ëistribution Of ëividend
d Issuing Additional Securities
d Performing Statutory Functions
d Management ëevelopment Functions
d Motivation Of Employees
d ëeveloping Vitality In The Organization
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á ëuties of Board of ëirectors
d ëisclosure of relevant facts
d Holding qualification shares
d Attending board meetings
d Getting permission for loans from the central government
d ëisclosure of personal interest
d Holding of personal interest
d Forwarding statutory report
d Filing return of allotment
d ëelivering share certificate
d Paying dividends to shareholders
d Maintaining books and registers
d ëisclosing own shareholdings.
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á 2eed for Board of ëirectors
d Overseeing the way the company conducts its business to insure that it is
managed effectively.
d Selecting, compensating and evaluating the CEO
d the board can provide the kind of advice and insight that may circumvent
mistakes or validate the direction the CEO is taking the company in.
d The Board can support management in the development of organizational
planning, succession and resource management.
d their primary role is one of a supporter, a coach and even mentors.
d They must also assume the role of questioners and monitors of company
performance.
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á Structure of Board of ëirectors
d The Board is made up of individual men and women (the ´ëirectors") who
are elected by the shareholders for multiple-year terms.
d Many companies operate on a rotating system so that only a fraction of the
directors are up for election each year; this makes it much more difficult for
a complete board change to take place due to a hostile takeover.
d In most cases, directors either,
Have a vested interest in the company,
Work in the upper management of the company, or
Are independent from the company but are known for their business abilities.
d The number of directors can vary substantially between companies
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á Meaning
d Generally, having Minorities and Women represented on Corporate Boards.
Some shareholder proposals also urge diversity of experience and age.

á 2eed
d Avoiding Conflict
d ëeveloping a spirit of Cooperation
d 2o Communication gaps
d A vast pool of experienced ëirectors
d Highly qualified Top management
d 2o Conflicts of Interests and Agenda Pushing
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á Types
d Gender ëiversity
d Age ëiversity
d Profession / Skill Set ëiversity
d Experience ëiversity
d Religion ëiversity
d Socio-Cultural ëiversity
d Other types like: -
Language ëiversity
Common Interests
Aesthetics

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á Gender ëiversity
d Gender diversity is an important aspect of Board ëiversity. Gender diversity
refers to the presence of women on Corporate Boards of ëirectors.
d The gender composition of the board can affect the quality of this
monitoring role and thus the financial performance of the firm.

á ë   
 
d   
   female directors are significantly less likely
to experience severe attendance problems.
d
       Another way of trying to understand how
women change boards is to see how they are deployed.
d ë         ëespite not having a discernible impact
on CEO compensation, female directors appear to affect director
compensation.
 

á Whether female directors are different from their
male counterparts?
d Female directors have more ëirectorships and shorter tenure than male
ëirectors. They are also younger and less likely to be retired from their main
occupation than male ëirectors. These differences are all statistically
significant( see appendix below).
d Female ëirectors are slightly busier than male ëirectors providing evidence
consistent with the view that firms actively seek female ëirectors but
female ëirectors are in short supply.
d Another characteristic in which male and female ëirectors clearly differ is
their status as independent, the average proportion of independent
directors is 63 percent; female directors are classified as independent in
80 percent of the cases

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á Age ëiversity
d When addressing age as an element of diversity, there are many facets to
consider. While one may believe that older board members bring more
experience to the table and younger members bring more energy and a new
outlook.

á Benefits of age diversity


d Age diversity in the workplace is not only mentally healthier, it is more
interesting.
d Value to an employer and all can contribute to the success of any business.
d Morale and productivity
d Heightened Innovation
d ëifferent Experiences

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á Profession / Skill Set ëiversity
d A good board must include the members having different specialized skills,
so that it becomes easier for org to capture the market as a whole.. and it
helps in getting regular updates from different fields.

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á Experience ëiversity
d Balanced boards require a range of experience. Typically, entities try to
ensure that their board of directors represent key areas they need to
provide proper oversight of activities for the kind of work they do.
d These could include expertise in such areas as legal, financial
management, human resources, or fund raising or philanthropic activities.
d Or an organization may need board expertise focused on education, health,
marketing, business, faith-based or the public/policy sector

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á Religion ëiversity
d Religion has a great deal of impact on business.
Buddhist: Social Responsibility (´concern that
the employer be a responsible part of societyµ)
Catholic: Consideration (´concern that
employees be taken seriously, be kept
informed, and their judgements be usedµ)
Muslim: Continuity (´ëesire for stable
environment, job longevity, and reduction of
uncertainty.µ)
Protestant: Employer effectiveness (´desire to
work for a company that is efficient,
successful, and a technological leader.µ)
2O religion preference: Professional challenge
(´concern with having a job that provides
learning opportunities and opportunities to use
skills wellµ)

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á Socio ² Cultural ëiversity
d ëifferent people with different cultures will definitely help
the organization to grow in a sense that an organization can
communicate with different sectors to grow their market
area with the help of their members from different cultural
group.

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á Other types of ëiversities
d Language ëiversity - The most obvious diversity is probably that of language
and communication. There are over 3000 languages spoken in the world,
and each language is a key to culture. In fact, it is said that a language is
the mirror of a culture, serving as an obvious reminder that each culture is
uniquely different.

Common Interests

Aesthetics
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á Creativity and ëifferent Perspectives - People from different backgrounds and


with different life experiences are likely to approach similar problems in
different ways.
á Access to Resources and Connections - By selecting directors with different
characteristics, firms may gain access to different resources.
á Career Incentives through Signaling and Mentoring - ëiversity in the boardroom
may signal to lower-level employees that the company is committed to the
promotion of minority workers or at least that their minority status is not a
hindrance to their careers in the company.
á Public Relations, Investor Relations, and Legitimacy - Some firms may benefit
more from conforming to societal expectations than others. Firms in which
institutional investors comprise a larger fraction of their shareholder bases may
surrender to investors· demands for board diversity. Those types of firms are
more likely to pay attention to director demographics, especially gender and
ethnicity. For those firms, having a more diverse board can be a means of
acquiring legitimacy in the view of the public, the media, and the government.
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u Chanda Kochhar was the Managing ëirector and Chief Executive of ICICI Bank,
where she spent her entire career after joining as a Management Trainee in 1984,
and taking the top job in 2009.
u She worked right across the bank, from retail finance to corporate infrastructure, risk
management and ecommerce.
u ICICI Bank is India's second-largest and the country's most global bank, with assets
of about $81bn. Its interests encompass Life Insurance, 2on-Life Insurance, Private
Equity, Mortgages, Retail and Corporate Banking.
u When she took over, in May 2009, Kochhar devised a five-year strategy, starting with
a significant shift of gear from growth to consolidation. "We focused on generating a
more balanced product mix, a diversified asset base and a tight control of costs,"
she explains. "We shifted our asset base, shedding high-cost deposits in favors of
low cost.´

             
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á Implementing Board ëiversity
d Building a ëiverse Board - A diverse board is the most important aspect of
corporate diversity. It shows the organization·s commitment and sets an
example for the rest of the organization.
d Building a Sustainable ëiversity Infrastructure - Beyond board diversity, building
a sustainable diversity infrastructure is critical because it is the basis by which
diversity will spread throughout the rest of the organization. The primary
components include an executive, a business plan, and resources like a budget,
staff, and external consultants.
d Implementing a ëiversity ROI Initiative - The diversity ROI initiative builds on the
value of the diverse board and infrastructure to prove the full business impact of
diversity.
á Conclusion
d Board diversity is a bigger issue than you think, but if taken into consideration
seriously, it will definitely help in creating the future for the organization.
d A diverse board demonstrates that diversity is a value that the company holds
throughout its business.

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