The importance of having a perfect board governance system is a hot issue due to the high-profile corporate scandals. What does perfect governance mean? What are the best ways to accomplish it?
Good governance is founded on the best practices of having clear governance policies, fostering an inclusive board, and conducting regular evaluations. Together, they assist boards to deal with governance, risk and compliance (GRC) issues and provide value to stakeholders.
It is essential that boards define the specific roles of the executive team and the board. They should then ensure that these roles are aligned. This will allow them to not be a micromanager in the daily operations of the business. The board should be focused on the bigger picture and delegate the day-to-day tasks to the leadership team.
Another best practice is to promote diversity in governance as well as on the basis of gender and ethnicity. This will ensure that the board has a wide spectrum of perspectives to consider issues and make decisions. It’s also essential that the board stays up to date with the latest regulations that will influence the governance.
Finally, the board should hold regular meetings and establish specific goals and objectives for the company. Every decision will be considered strategic. This will also make assessing progress and achieving more easily.