In the midst of constantly evolving risks and challenges, a board’s primary duty is to ensure that they provide oversight for the corporate mission. A board of directors is separate from the management of the company and it focuses more on the organization’s big issues as opposed to its daily operations. It formulates policies, sets corporate strategies, reviews executive reward and compensation, provides advice on financial matters, invests in the company, and manages risk.
In order to fulfill this obligation A board should take decisions that it believes will promote the success and growth of the corporation. This means taking into consideration the following fundamental factors:
Analyzing and identifying the potential risks that an enterprise may face. A board must identify and assess the security, financial, and legal risks of the company. It should also devise strategies to reduce the risk that could be caused by emerging and new threats like climate change artificial intelligence, digital currencies geopolitical crises ESG, and more.
It is essential to ensure that the corporation is legally operated and in compliance with relevant regulations. This includes ensuring that a corporation maintains accurate financial records and pays taxes, as well as providing proper disclosures to shareholders as well as 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 as necessary. This includes establishing guidelines for selecting the members of the board, evaluating candidates’ applications as well as conducting interviews and selections.
Assisting current and new members of the board. Each board member is expected to help the other achieve their goals. This means they must take part in meetings and attend in person or via the internet and add their perspective and experience to discussions.