Board Management Principles

The principles of board management are best practices that aid the board achieve its primary mission. They include the use of annual assessments to assess the board’s performance, the appointment of an independent chair and the inclusion of nonmanagement directors in CEO evaluations, as well as the use of executive meetings for discussions of sensitive issues such as https://www.contactboardroom.com/boardmaps-and-boardpaq-board-platforms-key-characteristics/ conflicts of conflicts of interest.

The responsibility of a board is to do what they believe is in the long-term best interest of the business and its shareholders. While a board has to consider the opinions of shareholders, it’s also responsible for exercising its own independent judgment. A board must also evaluate the potential for short- and long-term threats to the company’s ability to create value and weigh them in making decisions and strategies for the company.

There isn’t a universal model for the structure of boards and composition. Instead boards should be open to experimenting with different models and consider how each could impact the board’s overall efficiency.

Some boards are prone to adopting a geographic or special-interest-group representation model in which each director is perceived to represent the views of individuals located in a particular geographical area. This can result in boards that are too secluded and ineffective in addressing risk and issues facing the company. Boards should also be aware that the increasing focus on environmental, social and governance (ESG) concerns by investors demands them to be more flexible than they were in the past.