Board corporate governance is the function of an advisory board when it comes to supervising a business to ensure that the company operates legally and in the fair interest of its shareholders and stakeholders. Boards perform this function by operating independent of management and the day-to-day activities. The board makes sure that the company’s strategy plans are aligned with its legal obligations, financial obligations and ethical obligations. It also identifies the biggest risks facing the company and the methods for addressing these risks, and delegated responsibility for certain tasks to committees.
Most boards have a chairperson who is accountable to facilitate meetings, maintaining a good dynamic and setting the agenda. Chairs’ other responsibilities include to encourage discussion and debate and to make sure that the most important issues are given the attention they deserve. Board secretaries are essential in organizing regular board meetings and preparing agendas.
Boards are also getting more involved in issues such as sustainability as well as mergers and acquisitions, the development of talent and culture and strategies and risk management. They are also expected to have a strong focus on the ESG (environmental social, societal and governance) factors that have become critical to investors and consumers alike.
The effectiveness of a board’s work is dependent on its structure as well as the members who have a mix of knowledge, skills, and experience. It is crucial that members of the board have a deep understanding of the various industries and sectors within which their companies operate. This is essential in their ability to challenge and assist management in bringing the company’s strategy in line with the ever-changing consumer data management: key to M&A success and investor expectations.