The Board’s Corporate Governance Role
The role of a board in corporate governance is to ensure that the organization is legally run and in the best interests of shareholders and other stakeholders. This requires the board to operate independently of management and focusing on the company’s most important concerns rather than its day-today operations.
The board oversees the company’s strategies and operations and policies, setting the policy, managing risks and taking other decisions reserved to it. It also selects and oversees the performance of the CEO as well as the CEO succession planning process and sets the company’s culture and mission.
It also promotes the interests of shareholders, ensures that financial data is properly reported and ensures that investors are informed of all information that could affect their investments. It also takes steps to protect the integrity of a company and prevent fraud and other deceit. Directors should be urged to be trained regularly particularly on the latest technologies and important issues like environmental social, governance, and (ESG) or global crises that affect the way businesses are run.
A well-organized committee structure, with the secretary and chair plays a vital role in effective governance. It’s important to create an environment of open communications and collaboration among all members of the committee. The secretary of the committee will assist to set the agenda, and record minutes of meetings, and distribute them to all members of the committee.
A committee should be able to rely on its advisers for advice, reports and opinions. It is important that the committee comprehends the role of these advisors and assesses their qualifications.
