In today`s turbulent environment, the future of companies will increasingly depend on decisions made by Boards of Directors, on their ability to catch trends. Here is more about problematic questions for board meetings.
Competences of the Board of Directors
The board of directors is the central link of corporate governance, the effectiveness of which largely determines the substantive content of the corporate governance system. The effectiveness of the board of directors is not limited to formal powers, and nevertheless, the formal scope of competencies is important both for the full-fledged work of the board and for determining a reasonable balance of influences within the classic corporate triad – owners, board of directors, and management.
So, what exactly are the core competencies required by the Board of Directors? They are as follows:
- appointment and removal from office of key persons in the executive management;
- approval of the strategy and budget;
- approval of approaches to the risk management and internal control system, control over the effectiveness of these functions;
- defining the remuneration policy for executive management;
- approval of approaches to identifying and resolving conflicts of interest;
- approval of information policy and control over the practice of information disclosure;
- control over corporate governance practices, approval of key corporate actions.
Traditionally, Boards of Directors require qualifications, experience, and skills in strategy, audit, finance, human capital management, risk management, and corporate governance.
The Board of Directors acts as the main protective body of the company. He simultaneously guides and supports leaders as they make decisions in the struggle to survive, and makes sure that the company creates the conditions for a way out of this situation as a stronger and more resilient organization.
Essential questions to discuss at a board meeting
Good boardroom practices indicate that an important point in the work of the Board of Directors is holding sessions to develop the main strategic directions for the development of companies. Planning begins based on an understanding of the needs of customers in the company’s products or services, analysis of markets and the competitive environment, and then they go through the entire spectrum of solutions, starting with the analysis of the product (service) line and ending with the production program, the introduction of innovations, as well as the study of the state of the workforce. and management incentive systems.
Overall, the Board of Directors` work should focus on critical business improvement issues. They include the company’s strategy, building control over the work of management and its development, as well as helping him in solving problems that go beyond the typical ones.
The organization of the work of the Board of Directors implies that the issues are preliminarily submitted for an in-depth discussion in the specialized committee, which develops recommendations for the Board of Directors that help to form a professional judgment.
So, there is a list of great questions to ask at a board meeting:
- Is the corporation’s information database sufficiently secure?
- Does the pace of development of the company correspond to the trends of the world market?
- How productive is the company’s development strategy?
- Does the company’s value coincide among investors, management, directors, and other stakeholders?
- What about Enterprise Risk Management? How it can be evaluated?
- What are the priority areas of the company activity?
- What “best practices” should be standard practices at your company?
These questions are acceptable because such online meetings are based on identifying problematic issues and finding ways to address them further.