A role for corporate governance on the board requires a lot of oversight, insight and foresight. Board directors need to be more vigilant and take informed decisions as the business environment grows more complex and unpredictable. It also requires coordinated efforts by all employees to ensure company success.
A well-formed and well-organized board will comprise members who possess a wide range of skills and perspectives and are willing to challenge assumptions and perspectives. This will facilitate more comprehensive discussions and increase the overall effectiveness of the board.
As the responsibilities of the board continue to evolve and evolve, it is essential to be ready to tackle the new technologies and issues such as disclosures on climate and diversity which could affect a company’s bottom line. It’s also important to foster an environment that promotes and encourages continuing education and penalizes complacency.
The board should establish goals and objectives for the strategic plan, both long-term and short-term, and establish mechanisms to monitor the progress toward these goals. The board supervises the chief executives and establishes the guidelines and policies for the operation of the company.
It is the responsibility of the board to determine which risks are acceptable to take and how to balance them with safeguarding shareholder interests. The board should create risk assessments, establish policies to guide its own actions as well as those of the manager, and establish accountability systems to help the board fulfill its responsibility to steward its duties.