When it comes to corporate governance you’ll want to make sure your board is following the best methods for success. It’s not enough to check the boxes or comply with the minimum requirements. A solid board must continually evaluate its own performance in order to identify ways to improve. This is how the best boards get ahead.
A good practice for governance is to ensure that shareholders know the board’s roles, responsibilities and obligations. This includes explaining how the board’s compensation aligns with the goals of the company’s strategic plan and defining what is effective oversight and a solid system of checks and balances.
A clear plan to manage the risks of the company is also essential. This means establishing an understanding of the company’s short and long-term risk profile and working together to define the way in which the board will assess those risks. It is also about ensuring that management and the board have the tools to detect potential risks, such as internal factors such as cultural norms www.boardroomdeluxe.com/unique-ways-to-ending-a-board-meeting-well and poor communication between directors.
It’s also important to listen to the concerns of shareholders and encourage participation. This is particularly important in the current environment of increased shareholder activism. Boards, for instance, should work with shareholders to detect and address shareholder discontent even before the proxy season begins.