The effective board

THE very first principle of the Code of Corporate Governance states: "Every company should be headed by an effective board to lead and control the company. The board is collectively responsible for the long-term success of the company."

Yet, after ploughing through the detailed guidelines of the Code, it is difficult to take much comfort in the ideal that a board will necessarily be an effective one even if it is successful in complying with every guideline. That's because the Code is mainly an operational collection of rules and parameters on board composition, directors' relationships, board processes, information access and disclosures. There is little on what a company must do to stay successful in the long term - which should be the primary role of the board.

So, what should an effective board do?