Directors are accountable for the overall governance of a company and as such, have an obligation of fiduciary to act in the best interests of shareholders. Directors must also take into account the interests and needs of all stakeholders, which includes employees as well as suppliers and customers as in addition to investors, communities and other stakeholders. This approach is referred to as stakeholder management. It is one of the many fundamental principles that are the basis of the ESG (environmental social and governance) movement that is changing the way companies are run around the globe.
A board of directors may take on many different roles in the organization but at its heart it’s a team that works together to accomplish its goals. Whether that’s setting goals, providing direction and assistance to management, or ensuring that the business is in line with its vision and mission A well-functioning board is essential to the success of any business.
In terms of stakeholder engagement, a good board should seek out different perspectives in order to better be aware of the unique challenges and opportunities that the business faces. In addition, it should be able to establish clear channels for communication between the board and its stakeholders. This is not only an essential aspect of corporate governance but is also essential for establishing trust between the board and the stakeholders. Stakeholders will be more likely to do business with an organization that is transparent and transparent in its reporting, since it shows that the board is committed to its responsibilities. It can also help build an image for the business and increase its value over time.