Board corporate governance is the responsibility of a board of directors in advising and supervising a company to ensure that it functions legally and in the fair best interests of its shareholders and stakeholders. The boards do this by remaining independent of the day-to-day operations and management of the company. The board ensures that the strategy plans of the company are aligned with its financial obligations, legal obligations and ethical obligations. It also decides on the main threats to the company and the methods for addressing the risks, while delegating certain tasks to committees.
Many boards have a chair who is responsible for facilitating meetings, keeping an excellent atmosphere and setting the agenda. Other duties of the chair include encouraging discussion and debate, and ensuring that important issues are given the attention they deserve. Board secretaries are also essential in scheduling board meetings as well as creating the agenda.
Boards are also increasingly involved in issues like sustainability as well as mergers and acquisitions development of talent and culture, and strategies and risk management. They are also expected have a strong focus on the ESG (environmental, social and governance) aspects that are becoming important to both consumers and investors alike.
To be effective, a board must have the proper structure and have members with different expertise, skills, and knowledge. It is essential that members of the board have a thorough knowledge of the industry and sectors in which the businesses operate. This is essential for their ability to challenge and help management, while bringing the company’s strategy in line with the changing needs of investors and consumer expectations.