a) Improving Corporate Governance Practices:

1. Increase Transparency in Decision-Making: The board should ensure that all decisions made during board meetings are documented and communicated to shareholders. This can be done through detailed minutes and regular updates. Improved transparency will help build trust between the board and shareholders.
2. Enhance the Role of Non-Executive Directors: Non-executive directors should be empowered to provide independent judgment on issues of strategy, performance, and risk management. The board should ensure that non-executive directors have the resources and access to information needed to perform their duties effectively.
3. Establish Board Committees: The board should establish key committees, such as audit, remuneration, and nomination committees, composed mainly of non-executive directors. These committees can oversee specific areas of governance, ensuring that executive decisions are scrutinized independently.
4. Conduct Regular Board Evaluations: Regular evaluations of the board’s performance should be conducted to identify areas for improvement. These evaluations can be conducted internally or by an external party to ensure objectivity. Feedback from these evaluations should be used to enhance board effectiveness.

(Total: 8 marks)

b) Challenges in Implementing Good Corporate Governance Practices:

1. Resistance to Change: Implementing new governance practices may face resistance from executive directors or other stakeholders who are comfortable with the status quo. This resistance can be a significant barrier to adopting better practices.
2. Cost Implications: Good corporate governance often requires additional resources, such as hiring independent directors, conducting audits, and implementing new reporting systems. These costs can be a challenge for the company, especially if it is already facing financial difficulties.
3. Cultural Issues: Corporate culture plays a significant role in governance. If the existing culture does not support transparency, accountability, and ethical behavior, it can be challenging to implement and sustain good governance practices.

(Total: 6 marks)

c) Roles of Non-Executive Directors in Promoting Good Corporate Governance:

1. Providing Independent Oversight: Non-executive directors play a crucial role in providing an independent perspective on the board’s decisions. They are expected to challenge the executive directors and ensure that decisions are made in the best interest of all stakeholders, including minority shareholders.
2. Serving on Board Committees: Non-executive directors often serve on key board committees, such as the audit and remuneration committees. In these roles, they oversee critical areas of the company’s governance, ensuring that financial reporting is accurate, executive compensation is fair, and that there are adequate controls in place to manage risks.

(Total: 6 marks)