The job of a board member in corporate governance is to ensure that an organisation operates legally and in the best interest of shareholders and other stakeholders. This role involves operating independently of management and focusing on the company’s most important issues, not just the day-to-day activities.
The board is responsible for the company’s operations and strategies by establishing policy, directing risk, and making other decisions that are its responsibility. The board also chooses, oversees and plans the succession of the CEO, as well as the performance of the CEO. It also establishes the company’s mission and culture.
It also promotes shareholder interests, ensures that financial information is appropriately reported, and makes sure that investors receive all information that could affect their investments. It also takes steps to safeguard the integrity and reputation of a business and avoid fraud. Directors should be encouraged to be educated on a regular basis particularly on the latest technologies, important issues such as environmental governance, social, and governance (ESG) or global crises which affect the way in which businesses are operated.
A well-constructed committee structure, which includes a chair and secretary, plays a critical role in effective governance. It is important to foster an atmosphere of collaboration and open communication among all members of the committee. The committee secretary will set the agenda, take minutes of meetings and distribute them to members of the committee.
A committee should be able to rely on the reports, advice, and opinions of its advisers. It’s important for the committee to be aware the role of these advisors and to assess their qualifications.