Role of the Board of Directors explained
Role and Purpose of the Board
The board is essentially the ultimate decision making body of an organisation, the quality of which defines its very effectiveness. The boardroom ought to be the furnace that heats up robust debate and constructive diverse conversations, ultimately refining the best decisions for the good of the body corporate.
The board’s key purpose “is to ensure the company's prosperity by collectively directing the company’s affairs, while meeting the appropriate interests of its shareholders and relevant stakeholders”
Tasks of the board and indicators of good practice
Establish vision, mission and values
Determine the company’s vision and mission to guide and set the pace for its current operations and future development.
Determine the values to be promoted throughout the company.
Determine and review company goals.
Determine company policies.
Set strategy and structure
Review and evaluate present and future opportunities, threats and risks in the external environment; and current and future strengths, weaknesses and risks relating to the company.
Determine strategic options, select those to be pursued, and decide the means to implement and support them.
Determine the business strategies and plans that underpin the corporate strategy.
Ensure that the company’s organisational structure and capability are appropriate for implementing the chosen strategies.
Determine the company’s appetite for risk and to engage in the process of backing a robust risk management programme focused in the company’s business and the area(s) of its activities.
Delegate to management
Delegate authority to management, and monitor and evaluate the implementation of policies, strategies and business plans.
Determine monitoring criteria to be used by the board.
Ensure that internal controls are effective.
Communicate with senior management.
Exercise accountability to shareholders and be responsible to relevant stakeholders
Ensure that communications both to and from shareholders and relevant stakeholders are effective.
Understand and take into account the interests of shareholders and relevant stakeholders.
Monitor relations with shareholders and relevant stakeholders by the gathering and evaluation of appropriate information.
Promote the goodwill and support of shareholders and relevant stakeholders.
