The role of a board’s corporate governance requires oversight, insight, and foresight. As the business landscape becomes more complicated and volatile it requires more diligent monitoring and a more informed approach to decision-making by directors of the board. It also requires more coordinated efforts by all employees to ensure success.
A well-formed board should include members who have a wide range of expertise and perspectives that are able to challenge the board’s beliefs and opinions. This will lead to more thorough discussions and improve the board’s effectiveness.
As the duties of the board continue to evolve it is crucial to be prepared to tackle the new technologies and issues like disclosures on climate and diversity that could impact a company’s bottom line. It is also essential to create an environment that promotes and encourages continual education and punishes complacency.
The board must set the strategic goals and objectives for both the short and long-term and set up mechanisms to track progress towards the goals. The board oversees the chief executives and sets the guidelines and policies that govern the operation of the company.
It is the responsibility of the board to determine which risks are acceptable and how to manage them while protecting shareholder interests. The board should conduct risk assessments, establish policies to guide their own actions as well as the actions of the manager and implement accountability systems to fulfill its stewardship duties.