Achieving perfect board governance is a hot issue due to the high-profile corporate scandals. But, what exactly does it mean to have a flawless governance? And what are the best practices for achieving it?
Having clear governance policies, fostering diversity, and conducting regular evaluations of board members are the foundational best practices for ensuring good governance. Combined, they help boards manage risk, governance and compliance (GRC) challenges and deliver value to the stakeholders.
It is essential that boards define the specific roles of the executive team and the board. Then, they can make sure the roles are aligned. They will then be able to avoid managing daily operations in a micro-manage way. The board should be focused on the big picture and assign the management of day-today tasks to the executive team.
Another great practice is to advocate for diverse governance, both in terms of gender and ethnicity. This will ensure that the board has a variety of perspectives to discuss issues, and make decisions. It is also crucial that the board stays up-to-date with the latest rules and regulations that affect the governance.
In addition, the board must hold regular meetings and establish specific goals and objectives for the company. This will ensure that all decisions are made in a strategic manner. This will also allow you to better measure the progress and effectiveness.