The job of a board member 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 function independently of management, and concentrate on major issues instead of routine business.
The board oversees the company’s strategies and operations, setting policy, managing risk and making other choices reserved for it. It also decides on and oversees the performance of the CEO, as well as the succession planning process for the CEO and sets the company’s culture and mission.
It also protects the interests of shareholders, ensures financial data is properly reported and ensures that investors receive all relevant information which could affect their holdings. It also takes steps to safeguard the integrity of a business as well as prevent fraud and deception. Directors should be urged to be informed regularly in particular about the latest technology and key issues like environmental social, governance, and (ESG) or global issues that affect the way that businesses are run.
A well-structured structure for the committee, which includes the chair and secretary, is critical to effective governance. It is important to foster an environment of collaboration and open communication among the committee members. The secretary of the committee will create the agenda, record minutes of meetings and distribute them to the members of the committee.
A committee should be able to trust the reports, advice and opinions of its advisers. It is essential for the committee to be aware the role of these advisors and to assess their credentials.
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