Understanding the Board’s role in a changing business environment
In an article that discusses the delineation of roles between management of a company and its board, partner Cornell Wright has told the Director Journal’s column Directors’ Dilemma that fundamentally, a board’s role is one of oversight.
The article talks about the evolution of the role of a board and how this will continue to change in in the wake of growing business uncertainty.
“The board must ensure the corporation has management in place with the skills and experience to deal with a changing business environment in which a recession is a real possibility,” Cornell said.
He continued, saying it’s the responsibility of management to consider the risks and accompanying opportunities associated with an the uncertain environment. Cornell said they should stress-test them against realistic scenarios, and ensure its own financial incentives are properly aligned with the long-term best interests of the company.