Board corporate governance is the role of a board of directors in advising and supervising a business to ensure that it is operating legally, fairly and in the best interests of its shareholders as well as stakeholders. Boards operate independently of the management of the company and the day-to-day activities. The board ensures the company’s strategies are in line with its financial obligations, legal obligations and ethical obligations. It also decides on the main risks for the company and the methods for addressing them, delegating responsibility for certain tasks to committees.
A majority of boards have a chair who is responsible for facilitating meetings, maintaining an excellent atmosphere and setting the agenda. Other duties of the chair include encouraging discussion and debate, and making sure that important issues get appropriate attention. Board secretaries also play a crucial role in planning board meetings and preparing the agenda.
Additionally boards are becoming more involved in a variety of topics, including strategy and risk management, sustainability, mergers and acquisitions, as well as the development of talent and culture. They will also be expected to place a strong emphasis on ESG (environmental social and governance) issues that are becoming important for both consumers and investors alike.
To be efficient, a board needs to have the proper structure and have members who possess a mix of expertise, skills, and knowledge. This means that they internal corporate processes have a solid knowledge of the industries which the companies they represent and the way in which those industries operate. This is important for their ability to assist and challenge management and bring the business’s strategy in line with evolving investor and consumer expectations.