The role of the board in corporate governance is to ensure that the organization operates legally and in the best interests of shareholders and other stakeholders. This requires the board to operate independently of management and focussing on the company’s key issues rather than day-to-day operations.
The board is responsible for the management of risk as well as the operation and strategy of a company, and other decisions that are entrusted to it. The board also chooses as well as oversees and plans the succession of the CEO as well as the performance of the CEO. It also decides on the company’s values and culture.
It also protects the interests of shareholders, makes sure that financial data is accurately reported and makes certain that investors receive all information that could impact their holdings. It also takes steps to safeguard the integrity and reputation of the business and avoid fraud. It should encourage ongoing training among directors, especially on emerging technologies, key issues like environmental, social and governance (ESG) and global crises that affect how businesses operate.
A well-structured committee structure, which includes a chair and secretary plays a vital role in the effective management. It is crucial to create an environment of open communication and collaboration among all members of the committee. The secretary of the committee can help set the agenda, take minutes of meetings and distribute them to all members of the committee.
A committee must be able to rely on its advisors their advice, reports, and opinions. It is important for the committee to understand who these advisers are and to evaluate their qualifications.
