The role of a board’s corporate governance demands oversight, insight, and foresight. As the business landscape becomes more complicated and volatile it requires more diligent monitoring and a well-informed decision-making process from directors of the board. It also requires coordinated efforts of all employees to ensure company success.
A well-formed board will include members who possess a wide variety of skills and perspectives and are open to challenging the assumptions of the board and views. This will encourage more comprehensive discussions and increase the effectiveness of the board.
As the duties of the board are constantly changing it is crucial to be ready to deal with emerging technology and issues like disclosures about climate and diversity that could impact a company’s bottom line. It’s also crucial to develop an environment that promotes and encourages continuous education and punishes complacency.
The board must establish goals and strategies, both in the short and long term, and establish mechanisms to monitor the progress towards these goals. The board also oversees the chief executive officer, and formulates the guidelines and policies that govern the operation of the company.
The board is accountable for determining what risks are acceptable and how to manage them while safeguarding shareholder interests. The board should conduct risk assessments, develop policies that guide their own actions and the management’s actions and establish accountability systems in order to fulfill its stewardship obligations.