Board Responsibilities

The board of directors is the cornerstone of corporate governance, responsible for setting strategic direction, overseeing management, ensuring accountability, and safeguarding the interests of shareholders and stakeholders.

Effective boards combine diverse skills, independent judgement, and robust processes to fulfil their duties. The G20/OECD Principles of Corporate Governance (2023) provide the international benchmark for board responsibilities, emphasising the board's role in strategic guidance, effective monitoring of management, and accountability to the company and its shareholders.

Key Topics

Core Board Duties

Boards have both legal and ethical duties. Duty of care requires directors to act with the care that a reasonably prudent person would exercise. Duty of loyalty requires directors to act in the best interests of the company, not their own interests. Duty of good faith requires directors to act honestly and with proper purpose. These duties are enshrined in corporate law across jurisdictions and reinforced by governance codes and listing rules.

The 2023 revision of the OECD Principles strengthened expectations around sustainability oversight, requiring boards to consider the company's impacts on and risks from environmental and social factors. ESRS 2 (General Disclosures) requires specific disclosure on the board's role in sustainability governance.

Key Resources

• G20/OECD Principles of Corporate Governance (2023)
• ICGN Global Governance Principles

Further Reading

• G20/OECD Principles of Corporate Governance
• Corporate Governance Codes