Ten Governing Documents Every Board Member Needs

Considering that the board of directors is the most important governing body, its activity is usually formalized by the company’s internal documents or determined in its Charter. So, what are the main internal documents every board member needs?

Competence of the board of directors

The company considers the existence of a professional board of directors an important element of effective corporate governance. Members of the board of directors are aware of their responsibility to shareholders and consider as their main goal the conscientious and competent performance of the duties of managing the company, ensuring the maintenance and sustainable long-term growth of the value of its shares, as well as the protection and ability of shareholders to exercise their rights.

For the board of directors to be an effective management body, its activities should be aimed at protecting the rights of shareholders based on balancing the duties and powers of the board of directors so that it does not replace the management and ensures control by shareholders.

The board of directors has the right to resolve only those issues within its competence by law and the company’s Charter. These issues should be spelled out in the company’s Charter to eliminate ambiguity regarding the delimitation of the competence of the board of directors, the company’s executive bodies, and the general meeting of shareholders.

Essential governing documents for the board of director

The board of directors is the central element of corporate governance, the effectiveness of which largely determines the essential content of the corporate governance system. The significance of the board of directors is not limited to formal powers. Nevertheless, the formal scope of competencies is important both for the full-fledged work of the board and for determining a reasonable balance of influences within the classic corporate triad – owners, board of directors, and management. Key competencies for the board of directors should be clearly articulated in the company’s Charter. Even in those cases when the legislation refers certain issues to the competence of the board of directors, in practice, clarification and detailing of these competencies in the Charter is required. 

So, there are 10 governing documents every board member needs to be aware with:

  • Corporate Governance Code
  • Board Member Roles and Responsibilities;
  • Regulations on the procedure for convening and holding the board meetings;
  • Minutes of the meeting of the board of directors;
  • Policy in the field of internal control and risk management;
  • Regulations on strategic management;
  • Annual Operating Plan;
  • Principles for Interaction with the Audit Committee of the Company;
  • Company’s Annual Report;
  • Policy Manual.

It should be noted that the Corporate Governance Code is no longer only a document that explains the best standards for observing the rights of shareholders and facilitates their implementation in practice but also an effective tool for improving the efficiency of company management and ensuring its long-term and sustainable development.

Board software for efficient document management

Board management software ensures access to all these important documents for board members. Today, such digital platforms allow companies to share and store files remotely and enable collaboration tools. They ensure a single secure data storage for business-critical documents and another helpful tool for easy cooperation between board members. The timeliness and completeness of the organization’s information directly affect the development and adoption of management decisions in it. Board software allows its users to improve workflow technology effectively, including the optimization of procedures for the preparation and execution of the board documentation, streamlining the documentation load over time to distribute it more evenly.