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UNIT VI COMPANY STRUCTURE. GOVERNANCE
Glossary

to devolve (powers) передать (полномочия)

chart схема, таблица, график

subsidiary дочерняя компания, филиал

crucial решающий, ключевой, критический

to cast a vote отдавать голос (на выборах), опускать избирательный бюллетень

to wind up ликвидировать, завершать

to dispose (of) избавляться, передавать, продавать

remuneration вознаграждение, оплата

motion предложение (на собрании)

proxy полномочие, доверенность,

передача голоса или полномочия

poll голосование, число голосов, регистрация избирателей
Assignment to text 1:

  1. Read and translate the title of the text.

  2. What information is likely to be found in this text?

  3. Read the text. What is the subject?

  4. Was your guess shrewd?

  5. After the second reading of the text give a suitable Russian equivalent for the following:

  • a corporate person

  • day-to-day administration

  • articles of association

  • to retain the ultimate say

  1. Look through the last paragraph. What is the author’s thesis on the relationship between the general meeting and the board?

  2. Translate the text.

Text 1 Company Organization

By incorporation, there is formed a corporate person which is separate from the servants who work for it or the shareholders who are members of it, whether it be a small family company, the shareholders of which actively participate in decision making and day-to-day administration, or a large industrial concern, wherein ownership (by the shareholders) and management (by the board of directors) may be largely divorced from each other. The organic structure of this corporate person and the constitutional relationship between the company’s different organs are determined by the decisions of the members recorded in the articles of association and resolutions of meetings. In this fashion they determine how decisions are to be effected and how acts of the organs take effect as acts of the company itself.

The primary organ is the general meeting of the shareholders. It provides the forum in which all members are entitled to participate and vote. It will devolve powers of management to another organ, the board of directors, but retaining the ultimate say in general policy and decision-making, albeit decision-making in general meeting may be manipulated by the board.

The relationship between the general meeting and the board is not entirely clear. In theory, the ultimate decision-making power lies in the general meeting. It can override the wishes of the directors and take away from them the powers devolved to them. In practice, it tends to follow the lead suggested by the directors.
1. Find English equivalents to the following words in the text:

юридическое лицо, принятие решений, ежедневное управление, передавать полномочия, управлять, не принимать во внимание (отвергать) желания, решения собрания, основная политика.

2. Find derivatives of the following words in the text and translate them:

to decide, to incorporate, industry, to constitute, to associate, to relate.

3. Analyze the following sentences to determine the part of speech of the missing words. Supply the correct form of the word.

a. He has more____________ in his new job. He is ____________ for day-to-day administration of the store. (responsible)


b. He must _________ how to display goods, what amount of product to stock, etc. These ___________ are extremely important for the efficient operation of the store. (to decide)

c Personal ______________ between the employees determine the working environment in the company. This is __________ to the human resources department. (to relate)

d. Only large __________ concern can afford to raise huge amounts of capital. For small-scale business firms which are numerous in some __________ it’s impossible. (industry)

4. Match the words from list A with their synonyms from list B:

A. incorporation, to determine, to divorce, resolution, to effect, to be entitled, primary, to devolve, ultimate, to manipulate, to override, administration, power, lead, to suggest, separate, entirely, servant.

B. final, on the whole, to offer, independent, to delegate, to persuade skillfully, authority, direction, running, to regulate, to carry out, to have a right, to ignore, integration, to separate, employee, decision, main.

5. Answer the following questions:

What forms by incorporation?

What characterizes a corporate person?

What is the primary organ of the corporation?

Explain the relationship between the general meeting and the board of directors.

6. Render into English:

При образовании корпорации формируется юридическое лицо, функционирующее отдельно от служащих, работающих в компании и акционеров, являющихся ее владельцами. В небольшой корпорации акционеры принимают активное участие в принятии всех решений и ежедневной работе компании. Совершенно другое положение дел в крупных промышленных концернах. Там собственники (в лице акционеров) и управление (в лице совета директоров) в значительной степени разделены, т.е. удалены друг от друга. По закону, первостепенный по значимости орган в корпорации – это общее собрание акционеров. Собрание может передать полномочия по управлению компанией совету директоров, но окончательное слово при определении корпоративной политики и принятии стратегических решений остается за собранием акционеров.
Text 2 Board of Directors

The board of directors of a limited company is primarily responsible for determining the objectives and policies of a business. It is the directors who determine the direction the business is going to take. They will need to ensure that the necessary funds are available and will appoint key staff to whom they will delegate the authority to run the business on a day-to-day basis. They will need to design an effective organization structure so that there is both a chain of command linking one level of management with another and an effective communication network so that instructions can be passed downwards and information passed upwards.

The directors are appointed by the shareholders, normally at the company’s annual general meeting at which the chairman of the board will be expected to account for their stewardship during the previous year. The company’s accounts will be presented to the shareholders at that time so they can judge for themselves whether the board has been successful.

Direction in business is like strategy in a war situation. The strategic decisions determine the areas in which the company’s resources will be employed. Above all it involves planning to ensure that the business first survives and then flourishes. Strategic decisions, made by the board of directors, are concerned with the disposition of resources. This contrasts with the tactical decisions by means of which the senior executives (appointed by the directors) carry out in detail the plans conceived or approved by the board of directors. The fact that boards of directors tend to meet rather infrequently, say once a week, means that part-time directors can be elected to the board. Since they will not have departmental responsibilities within the company, they are often described as non-executive directors. Non-executive directors are not managers of the company; they are outsiders, often directors of other companies. There are arguments in favour of such directors: though they may lack a detailed knowledge of the company’s activities, they may bring expertise to the board. Some are lawyers, or experts in tax affairs, some have particular knowledge of the industry or of particular areas. Some represent influential groups of shareholders whose support is necessary if the board is going to carry out its plan, while others are directors in a number of companies and are used to interlock boards within a group of companies. For example, a holding (or parent) company may appoint a director from their board to serve on the board of a subsidiary company, with a view to keeping a watching brief on the directors’ activities.


1. Find English equivalents to the following words in the text:

структура подчинения, определять цели, направление, эффективная организационная структура, назначать, председатель, управленческий уровень, отчитываться, стратегическое решение, использовать ресурсы, выживать, процветать, аргументы в пользу, исполнительный директор, влиятельная группа, специальные знания, специалист в области налогообложения, дочерняя компания.

2. Find derivatives of the following words in the text and translate them:

object, to direct, to avail, to communicate, steward, strategy, to decide, to execute, tactics, frequent, department, responsible, to argue, expert, to influence.

3. Explain the following notions:

to determine the direction, the objectives and policies of the business; to delegate the authority to run a business on a day-to-day basis; effective communication network; to account for one’s stewardship; strategic decisions; tactical decisions; part-time directors; departmental responsibilities; to bring expertise to the board; influential groups of shareholders; to interlock boards.

4. Answer the following questions:

What is the board of directors primarily responsible for?

What do the directors need for organising an efficient operation of the company?

What is the procedure of appointing directors?

What is the chairman of the board expected to do at the company’s annual general meeting?

What is the difference between a strategic and a tactical decision?

Contrast executive directors with non-executive ones.

What objections might be raised against the appointment of non-executive directors?

Are there any arguments in favour of such directors?

What is meant by an interlocking of boards?

5. Add an appropriate noun or verb from the lists below to each of the following sentences where indicated:

a. The____________ of a company have the responsibility to ___________ that the legal requirements are complied with.

b. The directors of a company must _____________ a copy of the company’s annual _____________ to the Registrar of Companies.

c. The directors will ______________ decisions by passing resolutions at the ___________ meeting.

d. Each of the directors will normally have one vote when a _______________ is _____________.

e. Resolutions are _______________ when there is a majority of ________________cast in favour.

f. Executive directors are those who _____________ departmental___________.

g. The directors are____________ by the ______________ at the annual general meeting.

h. The managing director ____________ ___________ to the board for the performance of his management ______________.

Nouns: accounts, board, responsibilities, directors, votes, shareholders, resolution, team.

Verbs: make, proposed, elected, answers, passed, ensure, undertake, send.
Assignments to text 3:

  1. Read the headline. Make suggestions as for kinds of meetings described.

  2. Write down the questions the answers to which you would like to find in this text.

  3. Read the text and find the most essential statements. Do they contain the answers to your questions?

  4. Translate the text.

  5. Explain the following and suggest Russian equivalents:

  • show of hands

  • class meeting

Text 3 Meetings

Fundamental decisions concerning the company’s activities and future are decided in general meetings of the shareholders. Usually they are confined to the single annual general meeting (A.G.M.) which must be held in each calendar year for declaring dividends, considering accounts and the reports of auditors and directors, and for electing directors and auditors. Extraordinary general meetings may be called when the need arises. Meetings of a particular class of members or creditors are class meetings.

The power of decision as to the following generally rests in the general meeting: winding-up; changes in the memorandum and articles; payment of dividends; changes in capital structure; disposal of a substantial part of the undertaking; and the appointment, remuneration and control of directors. In addition, the general meeting can generally act where the board is unwilling or unable (e.g. because of deadlock) to exercise its powers.


The meeting has as chairman, a person elected by the members, generally the managing director or another director. A member may move any resolution on the subject matter indicated in the notice. Members may speak to the motion, after which a vote is taken. A show of hands (on which proxies cannot vote), with one vote per person voting, may decide the issue. A poll can be demanded by a specified number of shareholders or by the chairman, exercising his power to give effect to the true sense of the meeting. On a poll, each share generally carries one vote, but a member is not obliged to cast all his votes or to cast all those he does use the same way; hence, a nominee shareholder can give effect to the wishes of different beneficial owners.
1. Find English equivalents to the following words in the text:

объявлять дивиденды, деятельность компании, отчеты аудиторов, председатель, отдавать голос, безвыходное положение, приводить в действие, доверенность, структура капитала, номинальный акционер, владелец-бенефициар.

2. Find derivatives of the following words in the text and translate them:

to act, to undertake, to decide, to add, to pay, to appoint, to meet, to direct, to specify, to benefit.

3. Explain the following notions:

extraordinary general meeting, class meeting, power of decision, changes in capital structure, deadlock, to move resolution, to speak to the motion, show of hands, to vote by proxy, a nominee shareholder, beneficial owner.

4. Answer the following questions:

How often are general meetings of stockholders held?

What issues are usually discussed there?

What decisions is A.G.M. entitled to make?

What is a chairman?

What are the functions of the members?

Explain the essence of a “show of hands”.

Who can demand a poll and why?

Contrast a poll to a show of hands.

5. Render into English:

Общие собрания акционеров обычно ограничиваются ежегодным собранием, проводимым один раз в каждом календарном году. Основные вопросы – это объявление дивидендов, рассмотрение отчетов аудиторов и директоров, а также их избрание (или переизбрание). Если возникает необходимость, иногда созывается внеочередное собрание акционеров для обсуждения срочных вопросов. Председатель избирается членами собрания акционеров из состава директоров компании. Члены собрания могут выносить любые решения по вопросам, указанным в повестке. Обычно они сначала высказываются по вынесенным предложениям, а затем голосуют.
Assignments to the text 4:

  1. Read the text and find answers to the following questions:

-What is the most common view to levels of management?

-Are there any differences in responsibilities of the managers?

  1. After second reading write down all the words and word combinations describing activities and responsibilities of managers.

  2. Translate the text.

  3. Think if responsibilities and functions of managers differ from those of entrepreneurs.

  4. Assess your potential for being a manager.


Text 4 Levels of Management

Managers can be differentiated according to their level in the organization. Although large organizations typically have a number of levels of management, the most common view considers three basic levels: top, middle and first-line managers.

Top managers

Top managers make up relatively small group of executives who control the organization. Titles found in this group include president, vice president, and chief executive officer (CEO).


Top managers establish the organization’s goals, overall strategy, and operating policies. They also officially represent the organization to the external environment by meeting with government officials, executives of other organizations, and so forth. The job of a top manager is likely to be complex and varied. Top managers make decisions about such activities as acquiring other companies, investing in research and development (R&D), entering or abandoning various markets, and building new points and office facilities. They often work long hours and spend much of their time in meetings and on the telephone.

Middle managers

Middle management is probably the largest group of managers in most organizations. Common middle-management titles include plant manager, operations manager, and division head. Thus, the general manager of a Ford assembly plant in Detroit is a middle manager.

Middle managers are primarily responsible for implementing the policies and plans developed by top management and for supervising and coordinating the activities of lower-level managers. Plant managers, for example, handle inventory management, quality control, equipment failures, and minor union problems. They also coordinate the work of supervisors within the plant. In recent years, many organizations have thinned the ranks of middle managers since 1982, and Du Pont has made cuts of 15 percent. Still, middle managers are necessary to bridge the upper and lower levels of organization and to implement the strategies developed at the top. They can also be a significant source of information and productivity when given the autonomy to make decisions affecting their operating units.

First-line managers

First-line managers supervise and coordinate the activities of operating employees. Common titles for first-line managers are foreman, supervisor, and office manager. These are often the first positions held by employees who enter management from the ranks of operating personnel. In contrast to top and middle managers, first line managers typically spend a large proportion of their time supervising the work of subordinates.
1. Find English equivalents to the following words in the text:

руководители высшего звена, исполнительные директора, устанавливать цели, сложная и разнообразная работа, приобрести компанию, вкладывать в исследования и разработки, офисные помещения, руководитель подразделения, осуществлять политику и планы, контролировать и координировать деятельность.

2. Find derivatives of the following words in the text and translate them:

different, to organize, to execute, to act, to develop, to divide, to supervise, to produce, to employ, person.

3. Match the words from list A with their synonyms from list B:

A. to differentiate, level, common, basic, to control, to include, title, to establish, overall, external, complex, to acquire, to invest, to implement, failure, minor, plant, employee, personnel, to affect.

B. staff, layer, factory, to contribute, to get, to manage, complicated, to set, to distinguish, general, to carry out, to influence, typical, to involve, post, breakage, outside, main, insignificant, worker.

4. Explain the following notions:

top manager, overall strategy, operating policies, external environment, to enter and abandon various markets, to implement the plans and policies developed by top management, to bridge the upper and lower levels, significant source of information and productivity.

5. Answer the following questions:

What is the most common view on the levels of management?

What is a top manager? Give some examples of top managers’ titles and functions.

What titles belong to the category of middle management?

What are the responsibilities of middle managers?

What functions do first-line managers perform? Give some examples of first-line managers’ titles.

6. Render into English: