A board’s role in corporate governance requires oversight, insight and foresight. Board directors must be more vigilant and take informed decisions as the business environment grows more complex and unstable. It also requires coordinated efforts of all employees to ensure success.
A well-formed board will include members who possess a wide variety of skills and perspectives and are willing to challenge the board’s assumptions and perspectives. This will allow for more extensive discussions and enhance the board’s effectiveness.
As the responsibilities of the board are constantly changing it is crucial to be ready to tackle the new technologies and issues such as diversity and climate disclosures that could impact a business’s bottom line. It’s important to create an environment that encourages and rewards continuous learning and discourages complacency.
The board should set goals and strategic objectives for the near and long-term and establish mechanisms to monitor progress toward these goals. The board oversees the chief executives and sets the guidelines and policies for the operation of the business.
It is the responsibility of the board to determine what risks are acceptable to take and how to manage them while protecting shareholder interests. The board should conduct risk assessments, establish policies that guide their own actions and the management’s actions and implement accountability systems to fulfill its stewardship obligations.