HC-1.2 HC-1.2 Role and Responsibilities
HC-1.2.1
All directors must understand the Board's role and responsibilities under the Commercial Companies Law and any other laws or regulations that may govern their responsibilities from time to time. In particular:
(a) The Board's role as distinct from the role of the shareholders (who elect the Board and whose interests the Board serves) and the role of officers (whom the Board appoints and oversees); and(b) The Board's fiduciary duties of care and loyalty to thelicensee and the shareholders (see HC-10.2).May 2011HC-1.2.2
The Board's role and responsibilities include but are not limited to:
(a) The overall business performance and strategy for thelicensee ;(b) Causing financial statements to be prepared which accurately disclose thelicensee's financial position;(c) Monitoring management performance;(d) Convening and preparing the agenda for shareholder meetings; and(e) Monitoring conflicts of interest and preventing abusive related party transactions.May 2011HC-1.2.3
When a new director is inducted, the chairman of the Board, assisted by company legal counsel or compliance officer, should review the Board's role and duties with that person, particularly covering legal and regulatory requirements and Module HC.
May 2011HC-1.2.4
The
licensee should have a written appointment agreement with each director which recites the directors' powers and duties and other matters relating to his appointment including his term, the time commitment envisaged, the committee assignment if any, hisremuneration and expense reimbursement entitlement, and his access to independent professional advice when that is needed.May 2011HC-1.2.5
The Board should adopt a formal Board charter or other statement specifying matters which are reserved to it, which should include but need not be limited to the specific requirements and responsibilities of directors.
May 2011
