The Importance of Board Management Principles

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The board’s responsibility is to manage the company by exercising vigorous and diligent surveillance of key areas including risk and strategy. It is not, however, able to manage the company’s operations through taking over management’s responsibilities. The purpose of these responsibilities is to assist executives and the CEO deliver value for shareholders.

Boards must have an established structure and governance framework to carry out their work effectively. This includes a clear definition of roles that range from chairpersons to directors on their own, as well having a well-established method for determining priorities and making decisions.

A solid board governance framework requires a well-practiced method for planning meetings, including the agenda items. It also incorporates a strong governance system that clearly defines the role of the board, its responsibilities and relationship with management, as well as the scope of its authority. The framework also includes an explicit declaration of the board’s values and standards, including transparency, integrity and good communication.

Finally, the board should have a clearly defined strategy for identifying and forming the CEO, as well as overseeing succession planning. It should also have a strategy to deal with urgent issues, and be ready to shift its focus if it is required. The board’s governing practices must be in sync with the business and the board must be prepared to anticipate and react to the changes that are happening in today’s fast-paced, highly complex environment. In this regard, board members must make a strict dedication of their time and effort to their work on the board.