Juarez Leão is Founder & CEO of Leão Group, Chairman of the Board & Board Member, and a specialist in Corporate Governance, Retail, Franchising and Strategy.
By: Juarez Leão
Corporate Governance is an increasingly relevant topic in the business world, and one of the fundamental pillars of this practice is the Board of Directors. As a Board Member, I am often asked what exactly the importance of this body is in business success and what its responsibilities are.
The Board of Directors is responsible for a number of important functions within the company, but one of the most crucial is defining the business strategy. It is through strategic planning that the Board defines the company's long-term objectives, the strategies that will be used to achieve them, the actions that will be taken to put those strategies into practice and the way in which execution by the executives will be monitored at Board level.
But the Board's work is not limited to setting direction and defining strategy. It also has the role of monitoring the company's executive management, ensuring that it is in line with the defined objectives. This includes evaluating executives' performance and identifying opportunities for improvement, as well as reducing risks and ensuring business continuity.
Another important role of the Board is to ensure transparency and ethics in corporate actions. It must make sure that the company is complying with all applicable laws and regulations, as well as adopting good practices of communication and transparency with its stakeholders. This helps build a relationship of trust between the company and its stakeholders, which can be essential to the success of the business.
In addition, the Board of Directors also has the role of ensuring that the company adopts social and environmental responsibility practices. Companies that adopt sustainable practices tend to be more highly valued by the market and by society as a whole.
But for the Board to be effective in its functions, it needs to be made up of independent, qualified and committed members who are aligned with the company, who actively take part in the strategic planning process and who preferably have complementary knowledge. It is also important to adopt practices of transparency, ethics and social and environmental responsibility (ESG).
In short, the Board of Directors is one of the fundamental pillars of Corporate Governance and is of great importance in achieving the intended results. That is why it is essential for companies to invest in structuring this body and aligning it with the strategy, ensuring that it is fulfilling its functions effectively and contributing to the company's long-term success.
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