“Every company should be headed by an effective board which is collectively responsible for the long-term success of the company”*. The key word here is “effective”. But what does this mean in practice, and what steps need to be taken in order to achieve an effective board and to ensure each individual director plays their part?
The primary responsibility of the board of directors is to provide leadership to the company with the objective of creating long-term stakeholder value. The practical way that the board performs this task day-to-day is by exercising its function to make decisions on behalf of the company and by ensuring subsequent implementation of such decisions via board oversight of executive management, and the company’s external agents and delegates.
Whilst a robust oversight and risk management framework is clearly critical to good corporate governance, the effectiveness of the process by which a board considers and makes decisio… Read more >