| Proactive
Board Involvement
Our interviews suggest that most directors and boards
assume a passive role in relation to management. As a result,
management tends today to define who will serve on the board and
what topics will be discussed with the board.
PointStar believes that boards must become much
more proactive in defining their role, setting their own agenda
and determining the nature and composition of the board itself.
To achieve excellence in governance, boards need to:
1. Determine the overall composition of the board
– What mix of age, gender, experience, skills, and knowledge
is needed to oversee the company?
2. Define director profiles – What are the
desired personal characteristics and attributes for a director
of the company?
3. Set risk tolerance parameters – What level
of risk is acceptable? What types or sizes of risks require board
involvement or must be avoided at all costs?
4. Clearly define the board’s role –
What are the sizes, nature and types of issues that require board
involvement and/or approval.
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