A thriving business is built on the foundation of effective corporate governance. It is a set rules and systems that bring the interests of shareholders with those of other stakeholders such as employees, customers, and the company’s management. It also establishes internal control systems to ensure the accuracy of financial statements, safeguard assets and comply with the laws and regulations.
The board has the obligation to approve corporate strategy that is designed to generate long-term, long-term value. It must also select a CEO, supervise the management of the company, allocate capital for expansion, analyze and manage risks, and set the tone for ethical behavior at the top. The board should provide adequate disclosure and accountability, as well as engagement to demonstrate that it’s acting in the best interests of shareholders as a whole.
A strong board requires the support of a great executive team. Boards must be willing to collaborate with independent directors, experts in governance and consultants to gain the experience and knowledge they need to succeed. Attending governance conferences networking with peers, industry leaders and collaborating to exchange best practices and learn from their experiences are all feasible.
As the world shifts and our world is changing, so do our organizational frameworks. They need to be flexible enough to respond to changing trends and the challenges. A climate change crisis, for instance should spur companies to adopt sustainability strategies, frameworks, and practices and set emission reduction targets and monitor progress. This includes communicating with stakeholders and shareholders about the changes as quickly as possible and making reports available and providing sufficient information to any issues that may arise.
