Skip to main content

Directors are accountable for overseeing the management of a company and are obligated to act in the shareholders’ best interests. However, boards must consider the needs and interests of all stakeholders – including employees suppliers, customers, communities, investors, and many others. This method of business is called stakeholder governance and is one of the key concepts behind the ESG (environmental, social, and governance) movement that is revolutionizing business model across the globe.

A board of directors can assume a variety of roles within an organization but at its core it’s a team working in concert to achieve its goals. A well-functioning board of directors can play many roles, including setting strategies and providing guidance and support to management, and making sure that the company is operating in accordance with its vision and mission.

A well-run board will seek out diverse perspectives to better understand the unique challenges that the company faces. Additionally, it must be able to provide clear channels for communication between the board members and stakeholders. This is not just an essential aspect of corporate management, but it’s essential to build trust between the board and the stakeholders. Stakeholders are more likely to cooperate with a company that is transparent and open in its reporting, as it demonstrates that the board takes its responsibilities seriously. Additionally, it could help to build a stronger image for the business and boost its long-term value.