A role for corporate governance on the board requires insight, oversight and foresight. As the business landscape becomes increasingly complex and unstable it demands more vigilance monitoring and a more informed approach to decision-making by directors on the board. It also requires coordinated efforts among all employees to ensure company success.
A well-formed board should include members who have a wide spectrum of perspectives and skills and are willing to challenge board assumptions and perspectives. This will help facilitate more thorough discussions and enhance the board’s overall effectiveness.
As the responsibilities of the board continue to evolve, the board must be ready to tackle emerging technologies and critical issues like diversity and climate-related disclosures that may affect the bottom line of a business. It’s also crucial to develop an environment that is supportive of and encourages continuous education and punishes complacency.
The board must set strategic goals and objectives for the near and long-term and establish mechanisms to track progress towards the goals. The board also oversees the chief executive officer and establishes the guidelines and policies that govern the business’s operations.
The board is accountable to determine what risks are acceptable and how to balance them with protecting shareholder interests. The board should conduct risk assessments, formulate guidelines to guide their own actions and the management’s actions and establish accountability systems in order to perform its stewardship responsibilities.