Best practices for board governance are the ones that can help a board achieve success in its job as an oversight body. These include having a mix of directors from different backgrounds, keeping a reasonable committee structure and size, and fostering an open and honest board meeting setting. The most important aspect of all these, however, is to ensure that the roles and responsibilities of directors are well-defined.

The first step is often to create matrixes that list the specific duties each director and executive team member has. These matrices then get reviewed and periodically updated. The best practices may include a diversity criterion dependent on the requirements of each business. This is a way to ensure that board members are diverse in terms of age, gender, and ethnicity.

Another key aspect of best practice for the 21st century is making sure that the board’s strategy and objectives are in line with those of the business. This is a complicated task, which requires the complete attention of the board. The board should develop governance policies that enable it to be an enabler for the executive team, and not as a obstructionist.

Boards should also establish an internal framework that identifies risks and their impact on performance. They should take into account all the potential areas of risk and weigh them against the potential and cost of success. You can ask the management team for feedback on the amount of risk the company will accept. The board must work together to assess the information, make a decision, and develop an appropriate risk management strategy.