Directors are responsible for the overall direction of a company and as such have a fiduciary duty to act in the best interest of shareholders. However, boards must also take into consideration the interests and needs of all stakeholders — including employees suppliers, customers and communities, investors and many others. This approach is called stakeholder management. It’s just one of the fundamental principles that support the ESG (environmental social and governance) movement which is revolutionizing the way companies are managed across the globe.

A board of directors can assume a variety of roles within an organization, but at its core it’s a team working in concert to achieve its goals. Be it setting guidelines and assistance to management, or ensuring that the business is operating in accordance with its mission and vision A functioning board is crucial to the success of a business.

A well-run board will seek out a variety of perspectives to better understand the unique issues that the company has to face. It should also be able to establish clear channels for communication between the board members and the stakeholders. This is not only an important aspect of corporate management, but it is vital to build trust between stakeholders and the board. Stakeholders are more likely to cooperate with companies who are transparent and open about their reports, since it shows the board is taking its responsibilities seriously. Additionally, it will help to build a stronger image for the company and improve the long-term value.

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