The role of the board is to run the business by exercising a rigorous and thorough oversight in key areas such as strategy and risk. But it can’t also manage — or micromanage the company’s operations by infringing on management’s responsibilities, which are designed to assist the executive and CEO deliver value for shareholders.
Boards need a clear structure and framework to perform their duties effectively. This includes a clear definition of roles from the chairperson to directors individually as well being a decision-making procedure that is used to establish priorities.
A sound board governance framework requires a well-practiced method for planning meetings, including the agenda items. It also contains a robust governance framework that defines clearly the purpose of the board and its relationship with management. The framework contains a statement of the board’s governing standards and values, which include integrity and transparency.
Additionally, the board should also have a clear strategy to select and develop a CEO and overseeing succession planning. It should have a clear plan to address urgent issues that arise and be prepared to change 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 prepared to anticipate and react to the changes that are happening in today’s fast-paced, highly complex environment. Board members must dedicate a lot of time and energy to their board’s work.