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The Importance of Board Management Principles

The role of the board is to run the business by ensuring a thorough and consistent oversight of key areas, including risk and strategy. It is, however, not able to manage the company’s operations through taking over management’s responsibilities. The purpose of these responsibilities is to help the CEO and executive teams deliver value for shareholders.

In order to be effective in their work boards need an established governance framework and structure. This includes a clear division of roles that extend from the chairperson to directors on their own, as well being able to use a standardized decision-making procedure for determining priorities and making decisions.

A solid board governance framework is also dependent on a well-practiced procedure for arranging meetings, including the agenda items. It also includes a solid governance system that clearly outlines the role of the board, its role and relationship with management, and the authority of the board. The framework includes a declaration of the board’s governing principles and values, such as integrity and transparency.

The board should also establish a strategy for identifying the CEO, preparing the person, and overseeing succession. It should have a plan to address urgent issues and be ready to shift its focus as it is required. The rules and procedures of the board should be in line with business and the board must be able to anticipate and respond to the changes taking place in today’s fast-paced and highly complex environment. For these reasons, board members need to make a strict commitment of time and energy to their duties on the board.

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