Author's Name: Mark Schultz
Date: Sun 24 Jan 2016

A board charter – an important governance document

Organisations striving for best practice at the board and governance level will have a Board Charter that all board members understand and formally commit to through both the selection, induction and annual review processes. In this note, we outline the key components of a board charter.

Whilst the development and documentation of a board charter is generally unique to each organisation, there are a number of core components that should be included in very document. These include:

  • The organisation’s Vision, Mission and Values: a statement that defines the business and the principles that underpin all activities of the organisation;
  • The role of the board: clearly articulating what the governance responsibilities of the collective board; 
  • Duties & responsibilities of board members: details the specific and general expectations of individual board members;
  • Composition of the board: defining the ideal board for the organisation- skill set, diversity (age, gender, culture ) and knowledge and experience ( always mindful of the laws of the land);
  • Performance management: approach to individual and collective board evaluation and professional development;
  • Meetings: logistical details and expectations;
  • Relationships: between board members, the Chief Executive and management and staff;
  • Conflict of interest: how it is to be managed by both individual members and the organisation; and
  • Succession: the board’s policy on tenure, renewal, continuity and management thereof. 

The development of a board charter will require an investment of time, resources and thinking, however such a process will make a considerable contribution to achieving governance excellence.

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