Corporate governance of the board is the job of a board of directors in advising and overseeing a company to ensure that it operates legally and fairly, as well as in the best interests of its shareholders as well as stakeholders. Boards perform this function by operating independent of management and daily operations. The board ensures that the business’s strategic plans are aligned with its financial obligations, legal obligations and ethical obligations. It also determines the major risks that the company faces and the procedures to deal with them, delegating some of these tasks.
Many boards designate a board chair, whose role is to facilitate meetings and ensure good dynamic, as well in determining the agenda. Chairs’ other responsibilities include to encourage discussion and debate and make sure that important matters receive the attention they deserve. Board secretaries are also vital in scheduling board meetings and preparing the agenda.
Boards are also getting more involved in issues such as sustainability, mergers and acquisitions, development of talent and culture, and strategies and risk management. They will also be expected to place an intense focus on ESG (environmental social and governance) issues that have become important for both consumers and investors alike.
To be efficient, a board needs to have the proper structure and members with an array of abilities, knowledge and experience. This means that they have an understanding of the industry in which they work and how they operate. This is important for their ability to support and challenge management and bring the strategy of the company in line with the changing needs of investors and consumer expectations.