A thriving business is built on the basis of effective corporate governance. It is comprised of systems and rules that align shareholder interests with those of other stakeholders, which includes employees customers, company executives and employees. It also creates internal control frameworks to ensure accuracy of financial statements, protect assets and adhere to the laws and regulations.
The board is responsible to approve corporate strategy that is designed to provide long-term long-term value. It also has to choose a CEO, oversee the management of the company, allocate capital for growth, assess and manage risks and set the standard for ethical conduct at the top. The board must also demonstrate that it is acting in the shareholders’ best interests by providing adequate disclosure, engagement, and accountability.
A strong board needs the support of a great executive team. Boards must be prepared to work with independent directors, experts in governance and consultants to gain the experience and knowledge required to succeed. Participating in governance conferences, networking with peers and industry leaders, and working together to share best practices and learn from their experiences are all feasible.
As the world shifts and our world is changing, so do our organizational frameworks. They must be able to adapt to new trends and issues. A climate crisis, for example will force companies to adopt sustainability-related frameworks, practices and policies and establish emission reduction goals and track the progress. This means informing shareholders and stakeholders of these changes as soon as is possible, making reports easy to access and providing enough details to clarify any issues that might arise.