Composition of group boards

Board composition means the makeup of the board. The composition of the board must be set-up properly to maximise the effectiveness of the group structure.

Each company within the corporate group is a separate legal entity and requires its own board. A company’s board composition varies depending on whether the company is the holding company, an operating or holding subsidiary or a joint venture company.

Suitable members of the board need to be chosen carefully to:

• • manage each entity separately;
• • ensure that decisions are made in the best interests of that entity; and
• • limit the liability of that entity in respect of other entities within the group.

Board members of wholly owned subsidiaries are usually drawn from the holding company's executive and the most senior executives in the group are responsible for business conducted by the subsidiary.

See Composition of group boards.