Question Three

Mali Bank Ltd is a registered commercial bank providing banking services to the community of a small town of Nakonde in northern Zambia. The shareholders are holding their first annual general meeting at which they intend to choose the board of directors and other officers of the company. Mr. Ndalama Mankuncha who is a renowned corporate governance practitioner, is the main shareholder in the bank and is thrilled at the roles and duties of the board of directors and wants an effective board. He wrote a circular to the other shareholders pleading with that, our bank needs an effective board, we do not need rubberstamp or talking shop board. Our first board of directors needs to be an effective one to set a benchmark for the future boards of director.

Required:

1. Mr. Ndalama Mankuncha wants an effective board over the other two types mentioned above. State three weaknesses of:
2. The rubberstamp board (3 marks)
3. The talking shop board (3 marks)

2. Some of the company officers to be appointed at the first annual general meeting of Mali Bank Ltd are the directors and the company secretary.
3. State three (3) roles of a company secretary in a limited liability company. (3 marks)
4. Explain the roles you have stated in (i) above. (3 marks)
5. State three (3) statute disqualifications for appointment as a director in Zambia. (3 marks)
6. Explain the disqualifications for appointment as a director in Zambia that you have stated in (iii) above. (3 marks)

3. To expand to the other parts of the country, Mali Bank Ltd is thinking of public issue of shares or issue out debentures.

What is meant by:

1. Public issue of shares (4 marks)
2. Issue out of debentures (3 marks)

[Total: 25 Marks]