The role of the board is to run the business by exercising a vigilance and thorough surveillance of key areas including risk and strategy. But it cannot also manage — or even micromanage the company’s business by encroaching on the management’s responsibilities that are designed to help the executive team and the CEO provide value to shareholders.
Boards must have an organized structure and a clear governance structure to be able to execute their tasks effectively. This includes a clear delineation of roles that extend from the chairperson to individual directors, as being able to use a standardized decision-making method for determining priorities and making decisions.
Furthermore, a strong board governance system requires a well-planned process for arranging meetings and agenda items. It also contains a robust governance framework that defines clearly the function of the board and its relationship with management. The framework includes a statement www.contactboardroom.com/corporate-governance-what-is-it of the board’s governing standards and values, such as integrity and transparency.
Additionally, the board should also have a clear strategy for selecting and establishing the CEO and overseeing succession planning. It should have a plan for how it will address urgent issues that arise and be able to change its focus and activities if the need arises. The governance of the board should be in sync with the business, and the board should be able to anticipate and react to any changes that occur in today’s rapidly changing and highly complex environment. Board members must dedicate a lot of time and energy to their work on the board.