A flawless board governance system is a hot topic due to the scandals that have made headlines. What exactly is perfect governance? What are the best ways to attain it?
Good governance is based on the best practices of having clear governance policies, fostering an inclusive board, as well as conducting regular reviews. Together, they assist boards to manage risk, governance and compliance (GRC) issues and provide benefits to all stakeholders.
Boards must clearly define the role of the executive as well as the board. Then, they can ensure the roles are aligned. This will let them avoid micromanaging the day-to-day operations of the company. The board should focus on the bigger picture and delegate the management of day-to-day tasks to the leadership team.
Another best practice is to promote diversity in governance in both gender and ethnicity. This will ensure the board has a variety of perspectives to debate issues and take decisions. It is also crucial that the board stays current with the most recent regulations that impact governance.
The board should also meet regularly and establish goals and objectives for the company. All decisions must be strategic. This will also make measuring the effectiveness and progress easier.
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