The board’s responsibility is to oversee the business by exercising a vigilance and thorough oversight of key areas, including strategy and risk. But it cannot manage — or micromanage the company’s business by encroaching on management’s responsibility, which are designed to assist the CEO and executive team deliver value for shareholders.
To do their jobs effectively boards need a clear governance structure and framework. This includes a clear definition of roles that range from chairpersons to directors on their own, as well having a well-established procedure for determining priorities as well as making decisions.
In addition, a solid board governance framework requires a well-rehearsed process for arranging meetings and agenda items. It also incorporates a strong governance system that clearly outlines the role of the board, its responsibilities and relationship with management, as well as the extent of its www.contactboardroom.com/corporate-governance-what-is-it authority. The framework contains a statement of the board’s governing principles and values, which include integrity and transparency.
The board should also have an established strategy for identifying a CEO, developing that person and overseeing succession. It should have a strategy for addressing urgent issues that occur and be prepared to change its focus and activities if the need arises. The governance practices of the board must be in sync with the business, and the board should be able anticipate and respond to the changes that take place in today’s dynamic and highly complex world. This is why board members need to make a rigorous dedication of their time and effort to their work on the board.