A perfect board’s governance is the subject of debate due to high-profile scandals. What does perfect governance mean? What are the best practices for achieving it?
Good governance is built on the best practices of having clear policies on governance, creating the diversity of the board, and conducting regular evaluations. Together, they enable boards to address governance, risks, and compliance (GRC) and create value to the everyone involved.
It is vital for boards to define the unique role of the executive team as well as the board. They should then ensure that the roles are in line. They will then be able to avoid having to oversee daily operations. The board should focus on the bigger picture and delegate day-to-day management to the executive team.
Another option is to promote diversity in governance, both in terms of gender and ethnicity. This will ensure that the board is able to draw on a range of perspectives to discuss issues, and take decisions. It is also crucial that the board stays up with the latest regulations that will impact governance.
In addition, the board must regularly meet and establish specific goals and objectives for the company. This will ensure that all decisions are made in a strategic manner. This will also make evaluating the effectiveness and progress easier.