Many of the same considerations regarding board composition should be given to the composition of an advisory board. In short, an advisory board should not be used as a tool to circumvent best practices on board composition and independence. OVERSIGHT PRACTICES SHOULD EVOLVE OVER TIME As will be apparent to readers of our past 10 years’ of Davies Governance Insights reports and followers of governance trends and practices generally, good governance practices are not static. As a young company grows and evolves, so too should its governance policies and procedures in order to adapt to the changing nature of the issuer and the industry in which it operates. The ramifications of COVID-19 have resulted in many issuers re- evaluating established practices and identifying vulnerabilities that had previously gone undetected. On the flip side, sudden disruption can also present unidentified opportunities to streamline operations and facilitate increased shareholder returns. Boards should continually seek to challenge and pressure-test key assumptions. In addition to implementing oversight practices, keeping a written record of the deliberative oversight process at both board and committee levels is vital. Corporate minutes should reflect the careful process that was followed, including the time spent by the board or the committee on a given topic, the scope of the discussion, any external advice obtained, documents and agreements reviewed, the disclosure of any conflicts of interest and any in camera sessions. Effective record-keeping is not only critical in helping directors discharge their fiduciary obligations but also serves to discipline directors and ensure that they adhere to the corporation’s governance policies and procedures.
As will be apparent to readers of our past 10 years’ of Davies Governance Insights reports and followers of governance trends and practices generally, good governance practices are not static. As a young company grows and evolves, so too should its governance policies and procedures in order to adapt to the changing nature of the company and the industry in which it operates.
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Governance Insights 2020
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