The Importance of Board Management Principles

The board’s responsibility is to run the business by exercising a rigorous and arduous surveillance of key areas including risk and strategy. It is not, however, able to control the operations of the company by interference with management’s responsibility. These responsibilities are designed to assist the executive team and the CEO bring value to shareholders.

Boards must have a clear structure and governance structure to be able to execute their tasks effectively. This includes a clear separation of roles from the chairperson up to individual directors as well as a process for decision-making which is established to determine the priorities.

A sound board governance framework also requires a well-practiced process for planning meetings, including the agenda items. It also incorporates a strong governance system that clearly outlines the purpose of the board, its responsibilities and relationship with management, and the authority it has. The framework also contains an explicit description of the board’s values and standards, which include integrity, transparency and good communication.

Additionally, the board should also have a clear plan for identifying and forming the CEO, as well as overseeing succession planning. It should have a plan for how to address urgent issues that arise and be able to shift its focus and activities when the need arises. The board’s rules of governance must be aligned with business needs and the board should be able to anticipate and respond to the changes taking place in today’s fast-paced and highly complex environment. Because of this, board members must commit to an unwavering commitment of time and effort to their work on the board.

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