The Board’s Corporate Governance Role
A board plays a crucial role in corporate governance to ensure that the company is legal and operates in the best interests of shareholders and other stakeholders. This requires that the board operate independently of management, and focus on major issues instead of daily business.
The board is responsible for the management of risk, the operation and strategy of a firm, and other decisions that are entrusted to it. The board also selects, oversees and plans the succession of the CEO, as well as the performance of the CEO. It also determines the company’s values and culture.
It also promotes shareholder interest as well as ensures that financial information is accurately reported, and makes sure that investors are provided with all the information they need to make informed decisions about their investment portfolios. It also takes steps to safeguard the integrity of a business as well as prevent fraud and deception. Directors should be urged to be trained on a regular basis and especially on new technologies and important issues like environmental governance, social, and governance (ESG), or global issues that affect the way businesses are operated.
A well-organized committee structure, which includes the secretary and chair plays a crucial role in effective governance. It is important to establish an environment of open communication and collaboration between all members of the committee. The secretary of the committee will establish the agenda, record minutes of meetings and distribute them to the members of the committee.
A committee should be able to rely on its advisors their advice, reports, and opinions. It is crucial for the committee to understand who these advisers are, and to assess their credentials.