Unit 53: Corporate governance

Corporate governance

The way a company is organized and managed at the highest level. This can have a critical influence on the company’s performance.

board of directors

A governing body that supervises the activities of a business, a nonprofit organization, or a government agency. (They make key decisions, set policies and ensure the organization is being properly managed)

corporate board

Another name for the board of directors of a corporation. It oversees the company’s management, sets long-term goals and represents the interests of the shareholders.

board members

Are the individuals who sit on a board of directors. They help make important decisions, give advice and guide the direction of the organization. Board members can include executives, shareholders or outside experts

executive directors

Executive directors are members of the board of directors who are also part of the company’s management team. They work full-time, e.g. CEO/CFO

chief executive officer (CEO)

The highest-ranking person in a company. They are responsible for making major decisions, leading the company and managing overall operations. (The CEO often reports to the board of directors)

non-executive directors

Outsiders with relevant management experience who are invited to sit on the board, bringing their expertise and external view.

non-execs

Short way of “non-executive directors”

independent board members

(=the same as non-execs)

seats on board

Having positions on the board of directors. (They are a board member), e.g. large investors in a company like pension funds, so that they can influence how the company is run.

management board

Runs the company on a day-to-day basis.

supervisory board

Watches over the management and ensures it’s acting in the company’s best interest.

governance bodies

Are the groups or individuals responsible for overseeing how an organization is run, making sure it’s acting ethically, legally and in the best interests of its stakeholders.

stewardship

The way in which what belongs to others is guided, managed and protected.

chairman

The leader of a board of directors or other governance body

chairwoman

Female version of chairman, the person who leads a board of directors or governance body.

separation of roles

Usually refers to keeping the roles of Chairman/chairwoman and CEO separate, to ensure good corporate governance. (Some say it should be separated in order to avoid concentrating too much power in one person’s hands.)

leadership

The ability to inspire, guide and influence others toward achieving a common goal.

executive pay

Is the total package of salary, bonuses and benefits given to top-level managers (like the CEO, CFO or other senior executives)

executive remuneration

Another term for executive pay

compensation

Again another term for executive pay

rewarded

To get something because you earned it

share options (BrE)

The chance to buy shares in the company cheaply

stock options (AmE)

The chance to buy shares in the company cheaply

incentives

A payment or concession to stimulate greater output or investment

remuneration committee

A group within a company’s board of directors that decides how much executives and senior managers should be paid.

remuneration consultants

Independent experts who advise companies on how to design fair and competitive pay packages for executives and employees

remuneration packages

The total pay and benefits an employee (especially an executive) receives from a company

payouts

Refers to the distribution of money or benefits to someone, usually as a result of agreement, performance or event.

payoffs

The rewards or return someone receives as a result of their actions, decisions or investments

bonuses

Extra payments given to employees in addition to their regular salary, often as a reward for good performance or achievement of certain goals.

bailed out

Refers to when someone or something (usually a company, organization or government) is saved from financial trouble by receiving a large sum of money or assistance to prevent failure or collapse

fat cats

An informal or sometimes negative term used to describe very wealthy and powerful people, especially business executives or politicians who are seen as earning a lot of money without working hard for it