The Board’s Corporate Governance Role

Legally the board is required to ensure that an organization achieves their mission and has a well-thought-out plan of action and doesn’t fall into legal or financial difficulties. The way boards perform their duties varies greatly and is highly dependent on the situation.

A common mistake is that boards become too involved in operational matters which should be left to management, or that they are not aware of their own legal liability for the decisions they take and actions they take on strengthening online security with advanced cybersecurity behalf of the organisation. This confusion is usually caused by not keeping up with the evolving demands on boards, or from unexpected issues such as unexpected financial crises and staff resignations. This can usually be resolved by taking the time to discuss the problems facing directors and supplying them with a simple set of documents and a briefing.

Another common mistake is that the board delegates too much power and decides not to review the things it has delegated (except in the case of the smallest NPOs). In this situation the board loses its evaluation function and is unable to determine whether the operations are contributing to the satisfactory performance of the organization.

The board must also develop an effective governance system, including how it will interact with the general manager or CEO. This includes determining the frequency of board meetings and how board members will be chosen and removed, and the manner in which decisions are made. The board also needs to develop information systems that provide data on past and upcoming performance to support their decision-making.