In a world that is constantly changing risks and challenges, the board’s primary responsibility is to provide oversight for the corporate mission. A board of directors is independent of the management of the business, and is more focused on the company’s major issues rather than its day-today operations. It develops a corporate strategy, evaluates executive pay and rewards, gives input on financial matters as well as invests in the company and manages risks.
To fulfill this obligation, the board must make a decision that it believes in good faith will contribute to the growth of the company. This includes considering the following key elements:
Recognizing and analysing the possible risks an enterprise could confront. A board should examine and identify the legal, financial, and security risks posed by a company. It should also devise strategies to mitigate the risks posed by new threats such as climate change, digital currency, artificial intelligence geopolitical crises, ESG and many more.
It must ensure that the company operates legally and in compliance with relevant regulations. This includes ensuring that the company has accurate financial records, pays taxes and provides adequate disclosures to shareholders and other stakeholders.
Finding and evaluating the best individuals to fill the key positions. The board must recruit qualified individuals to serve in the positions of president and chair, secretary and treasurer (or combined secretary/treasurer), and other officers as necessary. This means setting criteria for selecting board members, evaluating applications as well as conducting interviews and deciding on candidates.
Supporting members who are new or existing of the board. It is the responsibility of each board member to assist each other achieve their goals. It is crucial that board members attend meetings either in person or online, participate in discussions, and share their knowledge and experience.