Corporate governance of the board is the job of a board of directors in advising and supervising a company to ensure that it functions legally, fairly and in the interest of its shareholders and stakeholders. The boards do this by being independent of the management and day-today operations of the business. The board ensures that the company’s plans for strategic planning comply with its legal, ethical and financial obligations. It also determines the biggest risks to the business and the processes to manage them, and delegate some of these tasks.
A majority of boards have a chair who is accountable for facilitating meetings, ensuring an appropriate atmosphere and setting the agenda. Other duties of the chair are to stimulate discussion and debate, and ensuring that important issues receive adequate attention. Board secretaries are essential in organizing board meetings regularly and preparing agendas.
Additionally boards are becoming more involved in a range of topics, including strategy and risk management, sustainability, mergers and acquisitions, and development of culture and talent. They will also be expected to place a strong emphasis 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 have members with diverse skills, knowledge and expertise. This includes ensuring that they have a good understanding of the industries which the companies they serve and the way in which those industries operate. This is crucial for their ability to support and challenge management and bring the business’s strategy to keep pace with changing investor and consumer expectations.