The Cornerstones of Good Board Work

DIF has defined The Cornerstones of Good Board Work to summarise what board work is and which principles good board work should follow.

  1. The Board of Directors acts in the interest of the Company. The directors do not represent the interest of any individual shareholder.
  2. The Board of Directors promotes the trust of the shareholders and other stakeholders in the Company.
  3. An essential task of the Board of Directors is to understand the operational environment and decide on the strategy of the Company as well as to ensure that the strategic goals are reached.
  4. The most important tasks of the Board of Directors include the selection, remuneration, and dismissal of the CEO. The Board of Directors – not the Chair alone – is responsible for the supervision of the CEO. The Board of Directors is also familiar with the other key persons in the Company.
  5. The Board of Directors supports and inspires the management, and when appropriate, challenges the management in a constructive way.
  6. The Board of Directors creates an effective remuneration system for the Company. It finds the right standards for setting goals, measuring performance, and rewarding.
  7. The Board of Directors has versatile expertise. The Board of Directors is diverse, and operates such that all directors are considered equal, and the atmosphere in the meetings is open for discussions.
  8. Each director is familiar with the Finnish Companies Act, Corporate Governance, and the pertaining rules and guidelines. The Board of Directors monitors the proper arrangement and legality of the operations of the Company.
  9. In addition to adherence to law, the Board of Directors acts in an ethical and morally sustainable way, responsibly and in anticipation of the regulatory environment.
  10. The Board of Directors and each director always acts with due care.

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