Corporate Governance Tips for a Strong Board

When it comes to corporate governance, you’ll want to ensure your board follows best practices for success. But it’s not enough to just tick the right boxes and follow the minimum requirements. A good board must continuously review its own performance in order to find ways to improve. This is how top-performing boards are able to stay ahead.

A good governance practice is to ensure that shareholders understand the board’s roles, responsibilities and responsibilities. This includes explaining the aligning of the board’s compensation with the company’s goals and defining what constitutes a successful system of oversight and checks and balances.

Another essential element is having an established framework to manage the risks of the company. It is essential to comprehend the risk profile of the company, both short- and long-term. Then, work with the board to decide the best way to assess these risks. It is also crucial to ensure that the board has the tools necessary to determine risk factors. This includes internal factors like culture norms and poor communication among directors.

It is also crucial to listen to concerns of shareholders and encourage them to participate. This is especially crucial in today’s environment of increased shareholder activism. Boards, for instance, should collaborate with shareholders in order to recognize and address discontent from shareholders prior to the time of proxy season.

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