FOLLOWING up on our previous articles, it is also advisable to split the role of chairman and Chief Executive Officer and the board to have formal schedule of matters and to meet regularly. According to the Common Wealth Association, the board should:
Ensure that corporation will continue as a going concern.
Exercise leadership, enterprise and judgment in directing the business.
Set objectives and strategies of the organization.
Ensure development of key policies and their implementation.
Monitor, evaluate and review the aims, strategies, policies, etc.
Form committees in key areas and ensure their functionality.
Ensure company’s adherence to laws of the land, regulations and best practices.
Ensure existence of communication web among all stakeholders.
Ensure efficacy of systems, procedures and internal controls.
Ensure working of a right blend of human and material (technological) resources.
Ensure identification and mitigation of all risks.
Set key performance indicators of the business enterprise.
Ensure flexibility of structure, products and delivery to face the challenge of fast coming globalization.

The role and responsibilities of the board include, but are not limited to:
The overall business performance and strategy for the company.
Causing financial statements to be prepared which accurately disclose the company’s financial position.
Monitor management performance.
Convening and preparing agenda for shareholder meetings.
Monitoring conflicts of interest and preventing abusive related party transactions.
Assuring equitable treatment of shareholders including minority shareholders.

The board should, at minimum, also be responsible to perform the following roles and responsibilities:

• Duty to approve and monitor company strategy: The board should assume overall responsibility of company’s business, risk management, and financial soundness. Thus, the board should review, approve and monitor the objectives, strategies and overall business plans of the institution, in line with shareholders’ expectations.

• Duty to ensure legal and regulatory compliance: All board members should undertake and fulfill their duties and responsibilities keeping in view their legal obligations under all the applicable laws and regulations.

• Duty to establish optimal management structure: The board should clearly define the authorities and key responsibilities of both the directors and the senior management without delegating its policymaking powers to the management and shall ensure that the management is in the hands of qualified personnel. In addition, the board should be responsible for human capital development process, including appointing, training, fixing the remuneration of and where appropriate, replacing senior management, and succession planning.

• Duty to ensure optimal control environment: The board should approve and ensure implementation of policies, including but not limited to, in areas of Internal Audit & Control, Compliance, Risk Management, Human Resources, Finance, Treasury Management, Investments, Acquisition/Disposal of fixed assets, Donations/Charities, Prevention of Frauds & Forgeries and any other operational area which the board and the management may deem appropriate from time to time. The board should also be responsible to review and update existing policies periodically and whenever circumstances justify.

• Duty to oversee company performance: The board should ensure existence of an effective ‘Management Information System’ to remain fully informed of the activities, operating performance and financial condition of the institution, the environment in which it operates, the various risks it is exposed to and to evaluate performance of the management at regular intervals

• Duty to implement corporate governance: The board of directors should show leadership and “set the tone at the top”. The board chairman should place corporate governance issues on the agenda of board meetings to ensure an efficient and timely treatment of all issues arising out in this respect. The board should also adopt code of conduct for itself and senior management.

This article is drawn from Dr. Rampersad’s new book “Authentic Governance; Aligning Personal
Governance with Corporate Governance” and will be continued in the next part of this column while Abiodun Fawumi is the Publisher of Ekocity Magazine.