The role of a board’s corporate governance is to oversee and advise the company to ensure that it operates legally, fairly and in its shareholders’ and stakeholders’ interests. Boards operate independently of company management and the day-to-day activities. The board ensures that the company’s strategies are in line with its legal obligations, financial obligations and ethical obligations. It also determines major risks facing the business and the procedures for managing them, and delegate some of these tasks.
Many boards have appoint a chair, who’s job is to facilitate meetings and ensure an atmosphere of harmony, as well as deciding the agenda. The chair’s other responsibilities are to spark discussions and debate, and to make sure that important matters receive adequate attention. Board secretaries also have a crucial role to play, scheduling board meetings on a regular basis and the preparation of agendas.
Boards are also more involved in issues like sustainability mergers and acquisitions, culture and talent development, and strategies and risk management. They are also expected to put an increased focus on ESG (environmental social and governance) issues that are becoming crucial for both consumers and investors alike.
The effectiveness of a board depends on its structure and the members’ mix of knowledge, skills and expertise. It is crucial that members of the board have a deep knowledge of the industries and sectors in which their companies operate. This is crucial for their ability to support and challenge management and bring the business’s strategy to keep pace with changing investor and consumer expectations.