Board directors are generally responsible, accountable, and in charge of the company’s management. They also have the obligation and authority to exercise powers to ensure prudent company management at multiple levels. Failure to perform a director’s duties can result in significant damage, penalties, personal liability and potential losses suffered by the company, its shareholders, and its creditors.

In other newsletters, we have discussed the Directors’ Duties and Responsibilities, including the Fiduciary Duties. There, we focus on a director’s codex to provide value for organisations looking for a good high-level framework and roadmap for beginning the director’s management journey.

  1. A company’s directors are responsible for several fiduciary duties that must be met. The code or the oath must further clarify the Directors’ moral and legal obligations, how the director will look out for the company’s best financial interests, and how the director must execute the authority to make the most critical decisions.
  2. The potential member must clarify why the candidate is running for the board. Is it to advocate for a diverse range of corporate perspectives and voices? Is it to oppose some of the current peculiarities? Is it to present a broad or narrow view of how we should address and align sustainability issues and solutions or climate challenges?
  3. How will the director fulfil the fiduciary duties? And the primary objective as candidates for the board of directors is to ensure proper and effective management of corporate funds.
  4. The potential director must firmly believe in the corporate principles of transparency, accountability, sustainability, and freedom of choice regarding the company’s products to the customers and stakeholders.
  5. The director must be committed to providing excellent service to the other director colleagues in terms of personal and individual expertise and capacity while being mindful of cost-effectiveness.
  6. The director must firmly believe that to achieve the corporate green transition goals and how they will be accomplished if some vital services and products rely on non-renewable resources. Furthermore, the director has opinions on exploring new sources of justifiable solutions to reduce corporate dependence on threats that are in corporate focus.
  7. The global challenges posed by geo-political issues and areas potentially threatening the core corporate values must be addressed and clarified. These solutions must also include areas of social responsibility to society. The director understands that the obligation is to create a better world for future generations by fostering innovation and implementing reforms to tackle the climate crisis.
  8. The director must clarify if the person is for or against the complete exclusion of certain non-sustainable or renewable areas or investments. How will the director be actively involved in developing technologies, digitisation, and the relevant transformation areas? Technology will play a crucial role in achieving corporate goals. How will the director support and back the management proposals to provide expertise in these areas?
  9. How will the director be committed to holding the company accountable for any violations of conventions? Does the director believe active ownership is critical in ensuring the company has a coherent ESG (Environmental, Social, and Governance) policy? By exercising corporate ownership rights, we can actively promote responsible business practices.
  10. The potential director must explain how the person will prioritise critical areas, including proper fund management, transparency, freedom of choice, excellent member service to other board members, and advocating for diverse perspectives to work towards sustainable solutions and ensure that the companies we invest in uphold ethical standards and have a comprehensive ESG policy.

The above generic codex will provide the documentation and basis for the principles and levels of accountability, sustainability transparency, and freedom of choice regarding the company’s products and services. The director must have access to transparent and open information about the services and products and a broad range of options to make informed decisions based on their preferences and needs.