The Board Management Principles are a collection of best practices that help a board achieve its governing mission. They include the use of annual evaluations to assess the performance of a board, appointment of an independent chair, the inclusion of non-management directors in CEO evaluations and the use of executive meetings for discussion of sensitive matters like conflicts of interest.

A board must be accountable to act in the best interests of the company and its shareholders, over the long run. While a board must take into consideration the opinions of shareholders, it is accountable for exercising its own judgment. A board must www.contactboardroom.com/corporate-governance-what-is-it also assess the potential risks that could impact a company’s ability to create value in the short and longer term and weigh these elements when reviewing corporate strategies and decisions.

There isn’t a single universal model for the structure of boards and composition. Boards must be prepared to play around with various models, and consider what they could do to improve their overall effectiveness.

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 could result in boards that are too insular and ineffective in addressing the issues and risks facing a business. Boards should also be aware of the fact that investors are placing greater emphasis on environmental social, governance and social issues (ESG). This requires more flexibility.