Is Your Governance Leading You Forward or Holding You Back?
Governance, often referred to as corporate governance, encompasses the system by which an organization is controlled and operates, and the mechanisms by which it, and its people, are held to account. Good governance is critical for the success of every organization, regardless of business structure (for-profit, non-profit, B-corp, social venture, etc.).
The board of directors plays a crucial role in the governance and strategic direction of a company.
Their primary responsibilities include:
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Strategic Planning: The board is responsible for setting the overall strategic direction of the company. This involves approving the company's mission, vision, and strategic goals. They may also be involved in major decisions related to mergers, acquisitions, and divestitures.
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Policy and Decision Making: The board establishes policies and makes key decisions affecting the company. This includes approving budgets, major investments, and significant business initiatives. They also provide guidance on risk management and compliance issues.
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Appointment and Oversight of Management: The board appoints the executive team, including the CEO, and monitors their performance. They are responsible for ensuring that the company has effective leadership in place and that management is aligned with the company's goals.
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Financial Oversight: The board oversees the financial health of the company, including approving financial statements, budgets, and major financial decisions. They ensure that financial reporting is accurate and transparent.
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Shareholder Relations: The board represents the interests of shareholders and works to enhance shareholder value. They may communicate with shareholders, address concerns, and make decisions on matters that affect shareholder interests.
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Risk Management: Boards are responsible for assessing and managing risks to the company. This involves understanding and mitigating various types of risks, including financial, operational, legal, and reputational risks.
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Compliance and Ethics: Boards ensure that the company operates within legal and ethical frameworks. They establish and monitor compliance programs to ensure that the company adheres to relevant laws, regulations, and ethical standards.
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Succession Planning: Boards are involved in succession planning for key leadership positions, including the CEO and other top executives. They ensure that the company has a pipeline of talented individuals to fill critical roles.
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Stakeholder Engagement: Boards engage with various stakeholders, including employees, customers, suppliers, and the community. They consider the interests of these stakeholders in decision-making processes.
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Monitoring and Evaluation: The board monitors the performance of the company against established goals and objectives. This includes evaluating the effectiveness of management and the overall governance structure.​
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Overall, the board of directors plays a critical role in providing oversight, strategic guidance, and ensuring the long-term success and sustainability of the company.
"Jerome was phenomenal. His style is very gentle, so that the heavy influx of information was quite digestible. We were all amazed in what we were able to cover in three hours. Additionally, I was impressed by his handling of veering discussions the Directors undertook as they were absorbing the impact of his wisdom and applying it to their go-forward strategies; he sat forward, watched, listened, recapped, and carried on with the content. It was so expertly managed!"
~ Rebecca Tunnacliffe, CEO
