question archive Findings Review of the Executive Team The executive team at KB is led by Sandra Renwood who is president, CEO and chairman of the board of directors
Findings Review of the Executive Team The executive team at KB is led by Sandra Renwood who is president, CEO and chairman of the board of directors
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Findings
Review of the Executive Team
The executive team at KB is led by Sandra Renwood who is president, CEO and chairman of the board of directors. This personal union is not precluded by the SOX regulations. But it is also not encouraged by American and international corporate governance principles. Even more, ICGN (2014, p.9) discourages that a former CEO becomes chairman after his executive term, let alone during the term. The UN (2006, p.12) claims that separation is considered desirable to prevent one person from incorporating too much power at the top of the organisation. CII (2015, p.6) asks to combine the roles in "very limited circumstances" only. Separation of duties is considered best practice acc. to the Combine Code (FRC 2014, p.7-8).
One of the problems under the current system at KB is that no board meetings without the CEO can be conducted in order to evaluate her performance, as asked for by ICGN (2014, p.10). If that were the case the board probably could be more challenging in assessing the executives and their business conduct.
INSTRUCTION: List the questionable practices with respect to the EXECUTIVE TEAM. Use complete sentences. Number your statements. Ensure that statements of similar subject shall only be presented as one item.(2pts)
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Lists of questionable practices by Executive Team:
1. There is only one person who holds three positions (President, CEO and Chairman of the Board) at the KB.
2. Presence of CEO in Board Meetings for the evaluation on the performance of the executives.
Step-by-step explanation
1. As per ICGN, UN, CII and Combine Code, their point is to have proper dissemination of position to ensure that the person doesn't hold too much control in the organization. Separation of duties should be considered at KB.
2. Since the CEO and the Chairman of the Board is one and the same person, assessment of executive performance cannot be done without her appearance.
