The Board Corporate Governance Role

A board’s role in corporate governance is to oversee and advise the corporation to ensure it is operating lawfully, fairly, and in its shareholders’ and stakeholders’ interest. Boards accomplish this by operating independently of company management and day-to-day operations. The board ensures that the company’s strategic plans align with its legal, financial and ethical obligations. It also determines the most significant threats to the company and the procedures for managing the risks, while delegating some of these tasks to committees.

Many boards appoint a board chair, who’s job is to facilitate meetings and ensure an atmosphere of harmony, as well in determining the agenda. Other duties of the chair include generating discussion and debate, and making sure that important issues get the attention they deserve. Board secretaries also have a crucial role to play, organizing regular board meetings and preparing agendas.

Boards are also becoming more involved in issues such as sustainability, mergers and acquisitions, growth of talent and culture and strategies and risk management. They should also put an increased focus on ESG (environmental social and governance) issues that have become important for both consumers and investors alike.

The effectiveness of a board’s work is dependent on its structure and the members with their mix of knowledge, capabilities and expertise. This means that they have an understanding of the industry in which they work and the way in which those industries operate. This is important for their ability to assist and challenge management and bring the company’s approach to keep pace with changing investor and consumer expectations.

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Anderson Anselmo