A thriving business is built on the basis of good corporate governance. It includes a set of rules and systems that ensure that shareholder interests are aligned with those of other stakeholders, which includes employees, customers and company executives. It also lays out frameworks for internal control to ensure the accuracy of financial statements, protect assets, and ensure compliance with laws.
The board has the responsibility to approve a corporate strategy that is designed to create long-term long-term value. It also has to select a CEO, supervise management, allocate capital to growth, manage and assess risks and set the standard for ethical behavior at the top. The board must demonstrate that it is acting in the shareholders’ best interests by providing enough disclosure, engagement, and accountability.
A strong board requires the support of an excellent executive team. Boards should be prepared to work with independent directors, governance experts and consultants to gain the expertise and knowledge they need to succeed. Attending governance conferences networking with peers and industry leaders, and working together to exchange best practices and learn from their experiences are all possible.
As the world evolves, so must our organizational frameworks. They must be capable of adapting to new trends and challenges. A climate change crisis, for instance will force companies to adopt sustainability strategies, frameworks, and practices, and set emission reduction targets and monitor the progress. This includes communicating with stakeholders and shareholders on the changes in a timely manner, as well as making reports available and providing sufficient information to clarify any issues that might arise.