It is desirable to have a set of agreed processes and practices focusing on what the board should address in order to conduct its affairs properly and effectively.
A board's key purpose is to ensure the company's prosperity by collectively directing the company's affairs, whilst meeting the appropriate interests of its shareholders and relevant stakeholders.
In pursuing its key purpose, a board faces a uniquely demanding set of responsibilities and challenges, the complexity of which can be seen in some of the seemingly contradictory pressures it faces:
The board must simultaneously be entrepreneurial and drive the business forward, while keeping it under prudent control.
The board is required to be sufficiently knowledgeable about the workings of the company to be answerable for its actions, yet be able to stand back from the day to day management of the company and retain an objective, long-term view.
The board must be sensitive to the pressures of short-term issues and yet be informed about broader, long-term trends.
The board must be knowledgeable about "local" issues and yet be aware of potential or actual non-local, increasingly international, competitive and other influences.
The board is expected to be focused upon the commercial needs of its business while acting responsibly towards its employees, business partners and society as a whole.
The IoD Standards for the Board are a basic guideline and we recommend that you obtain them and use them as the basis for reviewing your board's performance.