The Board’s Corporate Governance Role
August 30, 2024 by Karen
A board plays a crucial corporate governance role to ensure that the company is operating legally and in the best interests of shareholders and other stakeholders. This role requires independent functioning of management and paying attention to the company’s biggest issues rather than day-to-day operations.
The board oversees the company’s strategies and operations by establishing policy, directing risk, and making other decisions reserved for it. The board also chooses as well as oversees and plans the succession of the CEO, as well as the performance of the CEO. It also decides on the company’s values and culture.
It also promotes shareholder interests as well as ensures that financial information is appropriately reported, and ensures that investors receive all the information that could affect their investment portfolios. It also takes steps to protect the integrity and reputation of the business and stop fraud. It should encourage directors to be trained regularly particularly on the latest technologies and other important issues, such as environmental governance, social, and governance (ESG) or global crises which affect the way businesses are operated.
A well-constructed committee structure, including a secretary and a chair plays a vital role in ensuring effective governance. It is crucial to establish a culture of collaboration and open communication among the committee members. The secretary of the committee will help determine the agenda, as well as take minutes of meetings and distribute them to all members of the committee.
A committee must be able to trust the reports, advice and opinions of its advisers. It is important for the committee to be aware who these advisers are and to assess their credentials.
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