A perfect board governance is an issue that is gaining attention due to the high-profile scandals. But what exactly does it mean to have perfect governance? And what are the best methods to achieve it?
Establishing clear governance policies including fostering diversity, and conducting regular board evaluations are the foundational best practices for good governance. Together, they help boards to address governance issues, risks, and compliance (GRC) and provide value to the stakeholders.
Boards must clearly define the role of the executive and board. They can then ensure the roles are in line. This will allow them to not be a micromanager in the daily operations of the business. The board should be focused on the big picture, and delegate day to day management to the executive team.
Another best practice is to promote diversity in governance in the boardroom, both on the basis of ethnicity and gender. This will ensure that the board has a wide spectrum of perspectives to consider issues and make decisions. It is also essential that the board stays up with the latest regulations that affect governance.
The board should also meet regularly and set goals and objectives for the business. This will ensure that all decisions are made in a strategic manner. This will also help in measuring progress and success.