Corporate governance of the board is the responsibility of the board in advising and overseeing a corporation to ensure that it functions legally, fairly and in the interest of its shareholders and stakeholders. Boards accomplish this by operating independent of management and daily operations. The board makes sure that the company’s plans for strategic planning align with its legal ethical and financial obligations. It also decides on the main risks for the company and the processes for managing them, delegating responsibility for some of these tasks to committees.
Many boards appoint a board chair whose job is to facilitate meetings and maintain the atmosphere, as well as deciding the agenda. The chair’s other responsibilities are to spark discussion and debate and to make sure that important matters receive proper attention. Board secretaries are also essential in scheduling board meetings as well as creating the agenda.
In addition, boards are becoming increasingly involved in a variety of issues such as risk and strategy management, sustainability, mergers and acquisitions, as well as the development of talent and culture. They are also expected to have a an intense focus on ESG (environmental, social and governance) aspects that have become critical to investors and consumers alike.
To be effective, a board must have the right structure and include members with diverse abilities, knowledge and experience. This means that they have a solid understanding of the industries in which the companies they represent and how they operate. This is crucial to their ability to help and challenge management and bring the company’s strategy to keep pace with changing investor and consumer expectations.
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