In a world of fast-changing risks and issues, a board’s primary duty is to ensure that they provide oversight for the mission of the company. The board of directors acts independent of the management of a company and is focused on the company’s principal issues rather than its daily operations. It sets policies, establishes corporate strategies, examines executive compensation and rewards, provides advice on financial matters, invests, and manages risk.
In order to fulfill this duty in fulfilling this obligation, a board must make a decision that it believes in good faith to promote the overall success of the organization. This means taking into consideration the following core factors:
Recognizing and analyzing the potential threats that an enterprise might be facing. A board must determine and evaluate the legal, financial and security risks of a business. It should also devise strategies to mitigate risks that might be posed by emerging and new threats such as climate change, artificial intelligence, digital currencies, geopolitical crises, ESG, and more.
It is essential to ensure that a company is operating in compliance with applicable regulations. This includes ensuring that the company keeps 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 setting criteria for selecting board members, evaluating the candidates’ applications in interviews, and board room now info making selections.
Supporting board members who are new or existing. Every board member is accountable to help the other achieve their goals. It is crucial that board members attend meetings either in person or via video, take part in discussions and share their expertise and experience.