Board charter
Practical Law ANZ Glossary w-020-8187 (Approx. 3 pages)
Glossary
Board charter
A board charter is a document that outlines a company's corporate governance policy. Ideally, a board charter:
- Defines the respective roles, responsibilities and authorities of the board of directors, both individually and collectively, and management in setting the direction, management and control of the company.
- Establishes the guidelines within which the directors and officers are to operate as they carry out their respective roles.
- Documents the policies upon which the board has decided to meet its legal and other responsibilities.
- Approves the company's values and code of conduct to underpin the desired culture within the company.
- Ensures that an appropriate framework exists for relevant information to be reported by management to the board.
The ASX Corporate Governance Council's Corporate Governance Principles and Recommendations (4th edition) (ASX Principles) recommend that listed Australian companies have and disclose a board charter that sets out:
- The roles and responsibilities of the company's board and management.
- Those matters expressly reserved to the board and those delegated to management.
(Recommendation 1.1).
The ASX Principles must be complied with by listed companies on an "if not, why not" basis. Other public companies also often adopt a board charter as a matter of good governance. Proprietary companies are not subject to the ASX Principles, but may choose to adopt a board charter where appropriate.
For more detailed information on board charters and an example document, see:
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