The Board Corporate Governance Role

Corporate governance of the board is the responsibility of a board in advising and overseeing a company to ensure that the company operates legally, fairly and in the interests of its shareholders and stakeholders. Boards do this by operating independently of the management of the company as well as day-to-day operations. The board makes sure that the company’s strategic plans comply with its legal, financial and ethical obligations. It also decides on the main threats to the company and the best ways to manage them, delegating responsibility for some of these tasks to committees.

Many boards have appoint a chair, whose task is to facilitate meetings and maintain the atmosphere, as well setting the agenda. Chairs’ other responsibilities include to spark discussion and debate and to make sure that the most important issues are given appropriate attention. Board secretaries are also essential in organizing board meetings and in preparing the agenda.

In addition boards are becoming more involved in a variety of issues, including strategy and risk management, sustainability, potential 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.

The effectiveness of a board depends on its structure and the members with their mix of knowledge, skills and expertise. It is important that the members of the board have a deep knowledge of the industries and sectors in which their businesses operate. This is crucial for their ability to challenge and support management, helping bring the company’s policies in line with the changing needs of investors and consumer expectations.

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