The Board’s Corporate Governance Role

Legally boards are required by law to ensure that a company succeeds in its mission, has a solid strategy and doesn’t run into legal or financial issues. The data in business development on the website way in which boards are required to fulfill these obligations is different and highly dependent on the circumstances.

A common error is that boards get involved in operational issues which should be left to management, or they are unclear about their own legal liability for the decisions they take and the actions they take on behalf of the organisation. This confusion is usually caused by a failure to keep up with the ever-changing demands on boards or unanticipated issues such as financial crises and resignations of staff. It is often solved by taking the time to discuss the challenges facing directors and supplying them with a simple set of documents and a briefing.

Another mistake that is common is that the board over-delegates its authority and chooses not to look into the issues it has delegated (except in the case of the smallest NPOs). In this scenario the board is no longer able to perform its ability to evaluate and not be able to determine whether these operations contribute to a satisfactory performance for the entire organization.

The board should also create a governance plan, which includes how it will interact with the general manager or CEO. This includes setting the frequency of meetings and how board members will be selected and removed, as well as the manner in which decisions are made. The board also needs to develop information systems that provide valid data on past and future performance in order to assist in making its decisions.