A board’s role in corporate governance includes overseeing and providing advice to a corporation so that it operates lawfully, fairly, and in its shareholders and stakeholders’ best interest. Boards operate independently of the management of the company and the day-to-day activities. The board ensures the company’s strategy plans are aligned with its legal obligations, financial obligations, and ethical obligations. It also decides on the main risks facing the company and the methods for addressing these risks, and delegated responsibility for some of these tasks to committees.
Many boards appoint a board chair, whose role is to facilitate meetings and ensure good energy, aswell as deciding the agenda. Other responsibilities of the chair are to stimulate discussion and debate, and making sure that important issues receive proper attention. Board secretaries also have a crucial role to play, organizing board meetings regularly and preparing agendas.
In addition boards are increasingly involved in a variety of topics, including strategy and risk management, sustainability, potential mergers and acquisitions, as well as culture and talent development. They are also expected to have a keen attention to ESG (environmental social, societal and governance) aspects that have become crucial to consumers and investors alike.
To be effective, a board must have the right structure and include members with a mix of expertise, skills, and knowledge. This includes ensuring that they have an understanding of the industry in which the companies they represent and how these sectors operate. This is crucial to their ability to assist and challenge management and bring the business’s strategy in line with evolving investor and consumer expectations.