|
OPINION:
The Board of Directors is the supreme
decision making body of a company. Due
to business of directors or some other
reasons, if it is not possible to hold
Board meeting frequently for taking some
decision, a power advisory committee is
constituted for day to day working. For
example, a plant is located at distant
place from where the Board usually
assemble, or for some other specific
reason an advisory body may be
constituted. In any case the advisory
body can do work up to a certain extent,
within the limit of power delegated to
it, viz financial limit. In other cases,
it works purely as an advisory body. It
simply provides its advice to the Board
of Directors. It is, in turn, depends on
the Board whether it adheres to its
advice or not. In some cases, whenever
the advisory body exceeds its authority,
it should immediately bring into the
knowledge of the Board. It is the
responsibility of the Board to take a
decision for ratification of the action
or to reprimand the body. As per the Law
of Agency and Principal, The Board has
to ratify the action.
A nominee director, if he is also a
member of advisory body, is responsible
upto the extent that the advisory body
does not exceeds its limit. As a member
of the Board, he should bring into the
knowledge of the board any adversity of
the Advisory body. |
