Board's role inextricable from good stewardship

WHAT is the role of a company's board? Why does a company need to have a board? From a purely legalistic perspective, the answer seems obvious: Since 2012, Singapore's Code of Corporate Governance has stated that the board of a publicly listed company should bear responsibility for the company's long-term success.

In practice, this is somewhat more complicated. What qualifies as long-term success, and how does the board influence it? What should the board actually do? And what about companies that are not publicly listed, or non-profit organisations? Do they need a board of directors, and if they have one, should the board's role be the same as that of a publicly listed company's board?

One way of getting some clarity of the board's role is to view it from a stewardship perspective. Stewardship is defined as "the act of safeguarding and enhancing an organisation's capability to create economic and societal value over time". Stewardship is also about fulfilling one's responsibility in growing the assets entrusted such that they would be handed over in better shape. In practice, this means that the board's purpose is to find a way of responsibly maximising the company's value-creation abilities over the long term, and to constructively guide the company's management in carrying out that strategy.