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The Board’s Corporate Governance Role
A board is a key function of corporate governance that is to ensure that the company is legal and operates in the best interests of shareholders and other stakeholders. This role involves operating independently of management and focusing on the company’s major issues, not just the day-to-day activities.
The board oversees the company’s strategies and operations by establishing policy, directing risk, and making other decisions that are its responsibility. The board also selects the CEO, supervises and plans the succession of the CEO as well as the performance of the CEO. It also decides on the company’s mission and culture.
It also promotes shareholder interest as well as ensures that financial information is properly reported, and makes sure that investors are provided with all the information that may affect their investment portfolios. It also takes steps to protect the integrity of a business and prevent fraud and other frauds. It should promote ongoing education among directors, particularly on the latest technologies, important issues such as environmental governance, social and governance (ESG), and global crises that impact the way a business operates.
A well-formed committee structure, which includes the secretary and chair, plays a critical role in the effective management. It is important to establish a culture of open communication and collaboration between all members of the committee. The secretary of the committee will help to set the agenda, and record minutes of meetings, and distribute them to all members of the committee.
A committee must be able to rely on the reports, advice, and opinions of its advisers. It is important that the committee knows who these advisors are and evaluates their expertise.