How to Leverage the Power of a Supervisory Board for Optimal Corporate Governance

In these times of transformation, there needs to be a more robust connection between the supervisory board of an enterprise and the corporate executives, as well as a unique kind of guidance from both. Direction from the supervisory board is more essential than ever, as the fate of companies, employees and shareholders is often at stake.

A select few choices are only in the hands of the supervisory board: recruitment, maintenance, and removal of the CEO; setting up a climate of morality and rectitude; devising objectives and motivators for the executive team; and determining the company’s fundamental concept, danger tolerance, and capital structure.

Supervisory boards:  The “CEO’s most valuable asset”

The newest guidelines are as follows: Supervisory boards should take more active leadership of the enterprise, not just monitoring the top management. We need to broaden the concept of corporate governance from shareholder oversight to leadership of the company’s most important decisions. Board members need to be better leaders and immerse themselves in areas that were previously left for the top management to decide.

Every supervisory board must devise a plan to identify when to take the lead, when to collaborate, and when it should remain uninvolved to ensure a prosperous future for the business. Without this ability, the business may not be able to achieve its long-term goals and objectives. By carefully considering all options, the supervisory board can ensure a prosperous future for the business. They must develop a plan which allows them to identify when it is best to take a leading role, collaborate or remain uninvolved. This plan could be used as a guide to help the supervisory board make informed decisions which will be beneficial for the business.