A board plays a crucial function of corporate governance that is to ensure that the company is legally run and in the best interest of shareholders and other stakeholders. This is why the board operate independently of management and concentrate on important issues rather than the day-to-day business.
The board is responsible for the company’s operations and strategies, setting policy, managing risk, and making other decisions which are reserved to it. The board also chooses and oversees the succession of the CEO and the performance of the CEO. It also determines a company’s culture and mission.
It also promotes shareholder interests It also ensures that financial information is appropriately reported, and ensures that investors receive all the information that could affect their holdings. It also takes measures to protect the integrity and reputation of the business and to prevent fraud. Directors should be encouraged to be educated regularly, especially about emerging technologies, important issues such as environmental governance, social, and governance (ESG), or global crises that affect the way in which businesses are run.
A well-structured structure for the committee, with the chair and secretary is crucial to ensuring effective governance. It is important to foster an environment of collaboration and open communication among the committee members. The secretary of the committee will establish the agenda, record minutes of meetings and distribute them to members of the committee.
A committee should be able to rely on its advisors for advice, reports and opinions. It is essential that the committee is aware of the role of these advisors and assesses their qualifications.
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