The board management principles define how a board runs its affairs. They govern the relationship between the company’s Board of Directors and how it handles corporate issues that cannot be delegated to lower-ranking officials.
The board is responsible for many things that aren’t included in an organization’s annual report. For instance, the board must recruit and select a CEO, ensure that the company acts in its best interest, and communicate issues www.contactboardroom.com/corporate-governance-what-is-it of concern to shareholders. The board also has an important role in assessing the potential and capability of the business.
A increasing number of boards conduct annual assessments to assess and improve the way they perform their responsibilities. These assessments can be focused on the board as well as its committees, individual directors or the chair.
Another practice that is common is to keep a record of every meeting. This allows the board to understand how its actions impact others, such as employees and investors. A well-written minute can be a valuable source of evidence in legal proceedings.
In addition, the board must be able to determine and assess the risks. This means identifying the company’s weaknesses and preparing plans to eliminate or reduce them. This includes evaluating the impact of changes that could be enacted on other stakeholders and communities. Furthermore, the board must make sure that it is aware of any major developments in a timely fashion. The board, for example is required to be aware when CEO compensation is higher than the company’s overall performance and average worker salaries.