Your board should adhere to the highest standards in corporate governance. It’s not enough just to tick the right boxes or meet the minimum regulations. A strong board should constantly review its own performance to find ways to improve. This is how top-performing boards are able to stay ahead.
A key best practice in governance is to help shareholders to know the board’s role, obligations, and accountability. This includes describing the alignment of the compensation of the board with the company’s goals and defining what constitutes a successful system of oversight and checks and balances.
Another important aspect is having a clear framework in place to manage the risks of the company. This involves establishing a clear understanding of the company’s www.boardroomdeluxe.com/comparing-boardmaps-and-azeus-convene-board-platforms short – and long-term risk profiles and working together to define how the board will assess those risks. It is also important to ensure that the board has the tools to determine potential risks. This is a part of internal factors such as cultural norms and lack of communication between directors.
It is also crucial to listen to the concerns of shareholders and encourage participation. This is particularly important in today’s environment of increased shareholder activism. Boards should, for instance work with shareholders in order to determine and address any issues among shareholders before the beginning of the proxy season.