Board Management Principles
Boards are unique leadership structures that hold considerable power, and they are accountable to those within and outside the organization. However, they are an open structure that is only limited by state-by-state guidelines and the collective decision of a board to change its composition and structures.
While boards have a lot of responsibilities however, they should focus on monitoring and making management policy decisions, leaving operational matters to the CEO and executive team. This requires the development of guidelines and a governance framework to guide their actions and the managers’. It also involves the legal aspects, compensation, conflict of interests, community benefits and the evaluation of CEOs.
A well-functioning governance system is vital to the work of a board, and it should include clear documentation of the roles and the responsibilities of each director as well as committee. All directors should be capable of accessing and using the board portal. This helps directors effectively prepare for meetings, and helps board discussions keep their focus on the key issues of the meeting. It also allows for better communication between board members as well as the smoother transition of board members rotate.
A sound governance system includes the appointment of a lead or presidency director, a non-independent board member who is accountable for the efficient management of a meeting and establishing an agenda. It must also include scheduling executive sessions in accordance with the requirements of the stock exchange and the time when directors are able to have meetings with the CEO if management is not present.