The role of a board’s corporate governance is to oversee and advise the company to ensure that it operates legally, fairly and in its shareholders and stakeholders’ best interests. Boards perform this function by operating independently of company management and the day-to-day activities. The board ensures that the company’s plans for strategic planning comply with its legal, ethical and financial obligations. It also decides on the main risks that the company faces and the processes for managing the risks, while delegating some of these tasks to committees.
A majority of boards have a chair who is accountable to facilitate meetings, maintaining an excellent atmosphere and setting the agenda. Other responsibilities of the chair include stimulating discussion and debate, and making sure that important issues get proper attention. Board secretaries are also essential in scheduling board meetings and creating the agenda.
Boards are also becoming more involved in issues like sustainability as well as mergers and acquisitions the development of talent and culture and strategy and risk management. They are also expected to put an emphasis on ESG (environmental social and governance) issues that are becoming crucial for investors and consumers alike.
To be efficient, a board needs to have the proper structure and have members who possess diverse expertise, skills, and knowledge. It is important that the members of the board have a deep knowledge of the industries and the sectors in which their businesses operate. This is essential for their ability to challenge and support management, helping bring the company’s policies in line with evolving investor and consumer expectations.
