A board corporate governance role requires a lot of oversight, insight and foresight. As the business environment becomes more complex and volatile it requires more diligent monitoring and a well-informed decision-making process from directors on the board. It also requires coordinated efforts by all employees to ensure success.
A well-formed board should comprise members with a variety of abilities and perspectives, who are willing to challenge the board’s assumptions and opinions. This will help facilitate more comprehensive discussions and improve the effectiveness of the board.
As the duties of the board continue to evolve, it is important to be ready to tackle the new technologies and issues such as disclosures on climate and diversity that could impact a business’s bottom line. It is also essential to create an environment that promotes and encourages continual education and punishes insanity.
The board must set goals and strategic objectives for the long- and short-term and set up mechanisms to monitor progress toward these goals. The board also oversees the chief executive officer and sets the policies and guidelines that govern the company’s operations.
The board is responsible for determining which risks are acceptable and how to balance them with protecting shareholder interests. The board should conduct risk assessments, develop guidelines for their own actions as well as the actions of the manager and establish accountability systems to fulfill its stewardship responsibility.