Board corporate governance is the function of a board in advising and overseeing a company to ensure that the company operates legally and fairly, as well as in the interests of its shareholders and stakeholders. Boards do this by operating independently of the management of the company as well as daily operations. The board ensures the company’s strategy plans are aligned with its financial obligations, legal obligations and ethical obligations. It also identifies the most significant risks that the company faces and the processes to manage them, as well as delegating some of these tasks.
Many boards have a chairperson who is accountable to facilitate meetings, maintaining the atmosphere in a positive way and setting the agenda. The chair’s other duties are to spark discussion and debate and make sure that important issues receive adequate attention. Board secretaries also play a crucial role in scheduling board meetings and preparing the agenda.
In addition boards are getting more involved in a range of issues such as strategy and risk data management: key to M&A success management, sustainability, mergers and acquisitions, and culture and talent development. They will also be expected to place an increased focus on ESG (environmental social and governance) issues that are becoming essential for consumers and investors alike.
To be effective, a board must have the proper structure and members with diverse abilities, knowledge and experience. This includes ensuring that they have a solid understanding of the industries which the companies they represent and how those sectors operate. This is crucial for their ability to assist and challenge management and bring the business’s strategy in line with the changing needs of investors and consumer expectations.
