Board read more management principles are a set of best practices that help the board achieve its primary mission. They include the use of annual evaluations to assess the board’s performance, the appointment of an independent chair and the inclusion of nonmanagement directors in CEO evaluations, as well as the use of executive meetings for discussions of sensitive issues like conflicts of interest.

A board’s duty is to do what they believe are the best interests of the business and its shareholders. Thus, while a company’s board should take into consideration the opinions of shareholders, its duty is to use its own independent judgment. A board should also carefully consider the risks that could affect the company’s ability to create value in the short and longer term and consider these aspects when evaluating the effectiveness of corporate decisions and strategies.

Therefore, there’s no universal model for a board’s structure and composition. Boards must be prepared to experiment with different models and think about how they might impact 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 can result in boards that are too insular and ineffective in addressing risk and issues facing the company. Boards must be aware of the fact that investors are putting more focus on environmental social, governance and social issues (ESG). This requires more flexibility.