Board charters have become an important tool to aid good governance. As a policy document covering how the board will function, they can facilitate the discussion and documentation of appropriate governance practices and guidelines for a specific board.
Companies have considerable discretion regarding the contents of a board charter. Some organisations prefer a short document that touches on major governance issues but is not overly prescriptive.
Some people dismiss the board charter as just another compliance checklist item. They delegate writing the charter to the company secretary or company lawyers, and then ‘tick the box’.
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This document is part of a Director Tools series prepared by the Australian Institute of Company Directors. This series has been designed to provide general background information and as a starting point for undertaking a board-related activity. It is not designed to replace legal advice or a detailed review of the subject matter. The material in this document does not constitute legal, accounting or other professional advice. While reasonable care has been taken in its preparation, the Australian Institute of Company Directors does not make any express or implied representations or warranties as to the completeness, currency, reliability or accuracy of the material in this document. This document should not be used or relied upon as a substitute for professional advice or as a basis for formulating business decisions. To the extent permitted by law, the Australian Institute of Company Directors excludes all liability for any loss or damage arising out of the use of the material in this document. Any links to third-party websites are provided for convenience only and do not represent endorsement, sponsorship or approval of those third parties, or any products and/or services offered by third parties, or any comment on the accuracy or currency of the information included in third party websites. The opinions of those quoted do not necessarily represent the view of the Australian Institute of Company Directors.
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