In a world in which risks and challenges are constantly evolving the primary role of a board is to oversee the company’s mission. A board of directors is independent of the management of the company and it focuses more on the larger issues of the company than its daily operations. It formulates policies, sets corporate strategies, reviews executive reward and compensation, provides input on financial matters, makes investments, and manages risk.
To fulfill this obligation, the board must make an decision it believes in good faith will contribute to the growth of the company. This means taking into consideration the following essential elements:
Recognizing and analyzing the possible dangers of an enterprise. A board needs to identify and assess the financial, legal, and security risks of a business. It must also develop strategies to mitigate the risk posed by threats that are emerging such as climate change, artificial intelligence, digital currency geopolitical crisis ESG and more.
It is essential to ensure that the company operates legally and in compliance with applicable regulations. This includes ensuring that the corporation maintains accurate documents and records, pays tax and provides adequate disclosures to shareholders and other stakeholders.
Evaluation of key people. 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 oversee vs manage as necessary. This includes setting criteria for the selection of members of the board, evaluating candidates’ applications as well as conducting interviews and selections.
Supporting new and existing members of the board. Each board member is accountable to assist the other in achieving their goals. It is important that board members attend meetings either in person or online, participate and share their knowledge and experiences.