AS STEWARDS, directorates steer corporate affairs, provide managers with guidance and assess opportunities and risks. As such, they should be fairly rewarded.One way of doing this is to provide directors with share options. In essence, share options give the holder the right to purchase shares at a price below the market price at or before a predetermined date.The popularity of these schemes has increased over the past 30 years. However, there is a danger that stewards of companies may influence share prices for their own benefit. Excessive risk-taking might influence the short-term wealth of directors and shareholders positively, but could have dire consequences over the long run.To monitor the allocation of share options and enhance transparency, the King II Report on Corporate Governance of 2002 stated that the apportionment of share options to nonexecutive directors must be approved by shareholders. As share options might impair director independence, the King III Report of 2009...
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