The role of a board’s corporate governance requires a lot of oversight, insight and foresight. As the business landscape gets more complex and volatile it requires more diligent monitoring and informed decision-making by directors of the board. To ensure the success of a business it is also essential to coordinate efforts of all employees.
A well-formed and well-organized board will comprise members who have a wide spectrum of perspectives and skills and are open to challenging the assumptions of the board and opinions. This will promote more complete discussions and improve the overall effectiveness of the board.
As the responsibilities of the board continue to evolve, the board must be prepared to handle the latest technology and crucial issues like diversity and climate-related disclosures that could impact the bottom line of a company. It is crucial to establish a culture which promotes and encourages continual education and discourages the habit of complacency.
The board should establish strategic goals and objectives for the near and long-term and put mechanisms in place to track progress towards those goals. The board also oversees the chief executive officer and determines the policies and guidelines that govern the company’s operations.
The board is accountable for determining which risks are acceptable and how to manage them while safeguarding shareholder interests. The board should conduct risk assessments, establish guidelines for their own actions as well as the actions of the manager and establish accountability systems to fulfill its stewardship duties.