A role for a board’s corporate governance includes overseeing and providing advice to an organization to ensure that it operates lawfully, fairly, and in its shareholders and stakeholders’ best interest. Boards accomplish this by operating independently of the management of the company as well as day-to-day operations. The board makes sure that the company’s strategy plans are aligned with its legal obligations, financial obligations, and ethical obligations. It also determines the major risks for the company and the processes for managing these risks, and delegated responsibility for certain tasks to committees.
A majority of boards appoint a board chair, whose task is to facilitate meetings and maintain good dynamic, as well in determining the agenda. Other responsibilities of the chair include encouraging discussions and debate, as well as making sure that important issues receive adequate attention. Board secretaries are also crucial in scheduling board meetings as well as making the agenda.
Additionally boards are getting more involved in a variety of areas, including risk and strategy management, sustainability, potential mergers and acquisitions, as well as growth of talent and culture. They are also expected have a strong focus on the ESG (environmental, social and governance) aspects that are becoming essential to investors and consumers alike.
The effectiveness of a board’s work is dependent on its structure as well as the members’ mix of knowledge, skills and expertise. This includes ensuring that they have a thorough knowledge of the industries which the companies they represent and how those sectors operate. This is essential in their ability to challenge and support management, bringing the company’s strategy in line with the ever-changing consumer and investor expectations.
