The role of a board’s corporate governance includes overseeing and providing advice to a corporation so that it operates lawfully, fairly, and in its shareholders’ and stakeholders’ interest. The boards accomplish this by being independent of the day-to-day operations and management of the company. The board ensures that the business’s strategic plans are aligned with its financial obligations, legal obligations, and ethical obligations. It also determines the biggest risks to the business and the processes to manage them, delegating some of these tasks.
A majority of boards have a chairperson who is responsible to facilitate meetings, maintaining a good dynamic and setting the agenda. Chairs’ other responsibilities include to spark discussion and debate and make sure that important issues receive the attention they deserve. Board secretaries play an essential role, organizing board meetings regularly and making agendas.
Boards are also more involved in issues such as sustainability, mergers and acquisitions, development of talent and culture, and strategies and risk management. They will also be expected to place a strong emphasis on ESG (environmental social and governance) issues that are becoming crucial for investors and consumers alike.
To be efficient, a board needs to have the proper structure and have members with an array of abilities, knowledge and experience. This means that they have a solid understanding of the industry in which they work and how they operate. This is crucial in their ability to challenge and assist management in bringing the company’s strategies into alignment with the changing needs of investors and consumer expectations.