Embracing Corporate Governance – An Effective Board of Directors
When organizations and boards of directors work effectively together, everyone wins.
Once companies start to grow, they need more leadership to oversee all the moving parts. Too often, corporate governance and its benefits are overlooked or misunderstood by stakeholders, including the board of directors.
A board of directors can offer needed stability, oversight, and a fresh perspective to a business. Each board member brings experience and a unique perspective and can help management make wise decisions.
There are many factors to consider when choosing a board of directors, including ethical and bias concerns. An organization can learn how to recruit a diverse board of directors to create and implement policies, create needed subcommittees, and provide other useful oversight.
In Embracing Corporate Governance – An Effective Board of Directors, author Geary Reid shares theoretical knowledge and practical wisdom from years of experience working in leadership roles in organizations. Your organization can start reaping the benefits of corporate governance today with the knowledge and tips he provides.
Corporate governance is not as complex as some persons want to portray it. The study of corporate governance is unembellished and may sometime seem natural, yet it is essential for many persons. Those who work in the private and government sectors, family businesses, or religious organizations must embrace corporate governance.
This project provides both academic and practical information about corporate governance. It gives a deep look the things which are misunderstood about the subject. Persons who want to become board members now have one resource that gives them practical insight into what they are expected to know and do as board members.
As holders of the highest offices in the organization, each board member is expected to be ethical in the execution of their duties to shareholders and the organization. Shareholders have rights, and, if they are to use them, they too must become acquainted with those rights. Politicians or family-appointed board members are often loyal to those who appoint them rather than the organization, hence the great need for diversity and mixture on boards.
It is expected that those boards which do not have committees will consider establishing them. These committees will be able to assess detailed aspects of the organization and provide the board with updates at its meetings.
The roles of certain members of the board are critical. These critical roles are discussed so that members will be efficient and effective. Some board meetings are too lengthy. The volume of documents submitted is too substantial for directors to read and understand in its entirety.
Established organizations need vision and mission statements to guide their directions. The goals, objectives, and strategies must be designed to allow the vision and mission to be accomplished. Directors and management must be working towards increasing shareholders’ wealth. An absence of policies and approval limits may see many persons doing whatever they feel like doing. The board of directors must ensure that the organization has appropriate policies to guide its operation. The details of several policies are provided to help boards and organizations in this regard.
Many board members receive monthly management accounts and annual financial statements, but they do not understand them. In the future, board members are now equipped with such knowledge to make informed financial decisions for the organization.
The performance of every board must be evaluated so that directors will become better. Every board is expected to produce critical reports about the organization’s performance. While there are numerous good sides to most board members, there are also unethical things about certain board members, which are expected to change and change very soon.
Board members and corporate managers need to recognize the responsibilities and requirements of running an organization efficiently and ethically. Here, Geary Reid enumerates the benefits of corporate governance and shows the vital role that a board of directors can play. From helping to organize finances to making big decisions and creating business policies, the board of directors wears many hats. It needs to be composed of highly skilled, diverse, and unbiased persons who can bring expertise and strong leadership to help build up the organization. A good board of directors will ultimately add to the health and overall success of a growing organization.
After serving for many years as a senior and independent non-executive director, Geary Reid has become well versed in the practical aspects of corporate governance. He has seen the benefits that organizations can receive when they embrace corporate governance, and he seeks to convey what he knows from both a theoretical and practical perspective.
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