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Justify the following statement: Managing Director has substantial powers of management. - Secretarial Practice

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Question

Justify the following statement:

Managing Director has substantial powers of management.

Short/Brief Note
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Solution

(a) Managing Director is a Director Who has been entrusted with substantial powers of management under an agreement or by a resolution passed by the company at its general meeting or by the Board of Directors at its Board Meeting. Substantial powers are powers of executive nature like deciding the purchase policy, sales policy, credit policy, investment policy, selection and recruitment procedure, etc.

(b) Managing Director works under the superintendence, control, and direction of the Board of Directors. He is responsible for the implementation of the policies framed by the Board. He acts as a link between the Board and the staff of the company. He is responsible for the day-to-day administration of the affairs of the company. He works in two capacities, via, that of a Director and that of a Manager of the company.

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Key Managerial Personnel (KMP)
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Chapter 6: Directors and Key Managerial personnel of a company - EXERCISES [Page 101]

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Balbharati Secretarial Practice [English] 11 Standard Maharashtra State Board
Chapter 6 Directors and Key Managerial personnel of a company
EXERCISES | Q 6. 9) | Page 101

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