The optimum number of board members Mechanisms to evaluate the contributions of individual members Once the role of the board is determined, then it is possible to fill in the gaps of the existing composition. If board members represent particular constituencies, they may be unable to act as a member of the board in the interests of the institution, but instead will be apologists for other interests. This highlights the importance of independent board members who are chosen for their qualities of excellence. Since they do not have a financial stake or represent a specific constituency, they can be purely responsible to the interests of the corporation. The governance procedures and the actions of the board members should be such that they create accountability and enable the stakeholders to trust one another.
Governance gives shareholders confidence that managers are being supervised.
It creates checks to prevent management from serving its own interests. Governance engenders trusts that allows a financial institution to attract depositors and investors. Governance provides assurance to government officials and, in the case of financial institutions, to bank superintendents. One way to create trust in the governance process is to eliminate conflicts of interest. Board members should not receive any personal and clear objectives.