The role of a board in corporate governance is to ensure that the company is legally run and in the best interests of shareholders and other stakeholders. This is why the board be independent of management, and focus on issues of importance instead of daily business.
The board is responsible for the company’s strategies and operations and policies, setting the policy, managing risks and taking other decisions which are reserved to it. It also selects and oversees the performance of the CEO as well as the succession planning process for the CEO and sets the company’s culture and purpose.
It also promotes the interest of shareholders, makes sure that financial information is reported correctly and ensures that investors receive all information that could affect their holdings. It also takes steps to protect the integrity of a business and stop fraud and deceit. It should promote ongoing education among directors, especially on emerging technologies, key issues such as environmental governance, social and (ESG), and global crises that impact how a business is conducted.
A well-constructed structure of the committee, with an executive secretary and chair is crucial to ensuring effective governance. It’s important to create an environment of open communications and collaboration between all members of the committee. The secretary of the committee will create the agenda, keep minutes of meetings and distribute them to the members of the committee.
A committee must be able to trust the advice, reports and opinions of its advisers. It is important that the committee understand who these advisers are and to evaluate their qualifications.