Reliance is one of the pioneers in the country in implementing the best international practices of corporate governance.
The board of directors at reliance periodically reviews its composition for making sure a strong element of independence and commitment. The directors are elected by the shareholders. However the board plays a significant role in the selection of candidates for shareholders approval.
Roles and Responsibilities of Board and Management:
The board’s roles and responsibilities comprise establishing an efficient method for overseeing the affairs, keeping in view the company’s size, complexity, geographical operations and corporate tradition and culture. The Reliance’s framework is designed to:
a) Enable the board to give strategic guidance for the management.
b) Define the respective roles and responsibilities/duties of senior executives to make sure accountability and
c) Make sure a balance of authority such that no single individual has unfettered powers. To make sure the truthful and factual presentation of its financial position, the company has put in place a strong internal audit process. The board has as well constituted an audit committee, which is responsible to the external reporting, performance and objectivity of the internal audit function and independence of the external auditors.
To make sure long-term shareholder value creation and to promote shareholder participation in corporate affairs, reliance has established and maintained communication strategies, comprising a policy for clarity in notices of meetings. Reliance as well maintains its corporate website for convenient access by the shareholders to all the information regarding the company.
The company has adopted a remuneration policy which attracts and maintains talented and motivated executives so as to encourage improved performance of the company. The remuneration policy envisages a clear relationship between performance and remuneration, comprising the link between remuneration paid and the overall corporate performance.
Question: Describe the link between board of directors and corporate governance practice in Reliance.