The Board of Directors has been the black box of company law in large companies with numerous and dispersed shareholding bodies, the central management of the company’s business is necessary in the hands of the board. Yet company law has traditionally specified very little about how this body should operate. The idea that the board is central to the operation of companies was recognized from the beginning by the development of wide range of duties which apply to directors who undertake to act on behalf of the company. However, the questions of which functions should be assigned to the board and how the board should organize itself for the effective discharge of those duties were ones that company law did not seek to answer. The role of the board is to plan and strategize goals and objectives for the short- and long-term good of the company and to put mechanisms in place to monitor progress against the objectives. To this regard, board directors must review, understand and discuss the company's goals. In particular, the board relies on independent directors to challenge the board's perspectives to ensure sound decision-making. In essence, board directors act as stewards of the company that govern for the present times and provide guidance and direction for the future. It's in the board's best interest to develop good working relationships with managers. Corporations run best when the board and senior management hold the same perspectives on strategy, priorities and risk management. Communication is a vital component of good corporate governance. Boards must communicate clearly and in a timely manner to develop a sense of mutual confidence and trust with their managers. It's important for board directors to be having regular conversations with managers about risk mitigation and prevention. Managers need to understand risks so that they can put processes in place to protect the company. The objective of this study was to undertake a comprehensive review of Uganda’s legal framework regarding the structure, functions and powers of Boards of Directors, highlighting the strengths and weaknesses of such framework and recommending changes aimed at addressing any such inadequacies. The findings of this study are as follows: Chapter I, introduces the study and gives an extensive and detailed background to the area of study and its significance. Chapter II reviews Uganda’s corporate legal and institutional governance framework and the findings are that corporate governance issues in Uganda relate to the role of the board, accountability of the board to both shareholders and stakeholders, and financial malpractices, which have led to the collapse of many organisations in Uganda as a result of poor corporate governance practices. The chapter also deduces that the corporate governance legal regime in Uganda is important because it underscores the crucial role of the board of directors of any company and the significance of good accounting standards. Chapter III analyses the international codes like the Cadbury report in the United Kingdom, The UK Corporate governance Code, Kings Reports of South Africa and the Sarbanes-Oxley Act of the United States, among others. The findings are that corporate governance has developed tremendously around the globe often in reaction to corporate scandals. As it develops it creates new laws, regulations and codes both at a national, regional, sector specific and international level which countries like Uganda have adopted as best practices for corporate governance. Chapter IV analyses the code of corporate governance in the two African countries of South Africa and Kenya in a comparative study with the Companies Act, 2012. The findings are that the code of corporate governance of Uganda under the Companies Act, 2012 in comparison to its counter-parts in South Africa and Kenya is strenuous and not easy to implement especially with regards to private companies where it is voluntary to adopt the said codes into the articles of association of such companies. Finally, Chapter V draws conclusions from the research gathered in the preceding chapters and makes recommendations of how best the code of corporate governance in Ugandan under the Companies Act can be improved to enable the Board of Directors effectively and efficiently carry out its role. The recommendations of this study included inter alia; Sanctions on conflict of interests; Relations with Shareowners and key stakeholders; Selection of board members with skills and experience; Mandatory Corporate Governance Structure for Private Companies; Amendment of Table F to the Companies Act, 2012; Compliance and Enforcement of the code of corporate governance under the Companies Act, 2012, among others.

show more