A Primer on Corporate Governance, Second Edition, 2nd Edition

Chapter 10

Creating a High-Performance Board

Managing Itself: A Board's First Priority

A strong and effective board is clear about its role in relationship to management and understands the difference between managing and governing. A board’s principal duty is to provide oversight; management’s duty is to run the company. A good board also understands that it, not management, has the ultimate responsibility for directing the company’s affairs as defined by law.

To meet these obligations, a board must take responsibility for its own agenda, or it will not be independent. Management cannot be responsible for directors’ skills and processes and should not have more than a consultative role in decisions, such as choosing new directors. Boards can ...