Board governance best practices are the ones that will help a board succeed in its job as an oversight body. They include having a mix of directors with different backgrounds, maintaining a proper committee structure and size, as well as creating a transparent and open board meeting setting. The key to all of these, however, is ensuring that the roles and responsibilities of directors are clearly defined.

The first step is to create matrixes which document the specific roles each director or executive team member has. These matrices will then be reviewed and updated on a regular basis. Depending on the specific needs of each firm, the most effective practices may also include a diversity criteria, which aims to ensure that boards are composed of members who are diverse in gender, age and ethnicity as well as tenure.

This modern best-practice requires that the board’s goals and strategies are aligned with the objectives of the company. This is a complicated task, which requires the full attention of the board. The board needs to develop guidelines for governance that allow it to function as an enabler instead of a stifler for the executive team.

Boards must also establish an internal framework that flags risks and their potential impact on performance. They should consider all of the possible risk areas, weighing them against the probability and cost of success. You can ask the management team for their feedback on the amount of risk that the company will take. Ultimately, a board should work together to review all relevant information, take decisions and devise a plan to manage risk.

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