Governance and Boardroom Practice
The board's core functions
Governance is about how authority is exercised, not merely how it is documented. A candidate must be able to distinguish the board's direction-setting role (strategy, risk appetite, values) from management's execution role. Understand the classic board committees - audit, risk, remuneration, nomination - and why independence matters on each. Know the difference between executive, non-executive and independent directors; a common trap is treating "non-executive" and "independent" as synonyms, when a former CEO may be non-executive yet not independent.
Meetings and decision-making
Be fluent in quorum, notice, conflicts of interest, minutes and reserved matters. Understand that a conflict of interest must be declared and managed, not simply noted; questions often test whether a conflicted director should withdraw from discussion, voting, or both. Distinguish unanimous written resolutions from decisions taken at a properly convened meeting.
Traps to watch
- Chair versus CEO separation: separation is good practice but not universally mandatory; read the question's jurisdiction.
- Board evaluation: internal review versus externally facilitated review - know when each is expected.
- Delegation: the board may delegate authority but cannot delegate its accountability.
Rule of thumb - the four-question test
Before answering any boardroom question, ask: (1) Who holds the decision right? (2) Is the meeting properly constituted? (3) Has any conflict been managed? (4) Is the decision recorded? If all four are satisfied, the action is likely valid; if any fails, the process is defective regardless of the outcome's commercial merit.