The shields or pavises along the side of the ship are a pavisade which is
A protective barrier made up of shields bearing the arms of those on
board placed along a vessel's sides.
The Wikipedia Pavise article has a slightly more detailed description:
a decorative row of shields or a band of canvas hung around a sailing
vessel to prevent an opponent from observing the activities of those
on board and to discourage boarding.
The Mary Rose (launched 1512, sunk 1545) with pavises along the centre. This somewhat stylized depiction is from the Anthony Roll, presented to Henry VIII in 1546.
The Mary Rose
was lined with pavises. Originally these were the shields of the
knights and men-at-arms positioned along the sides of the ship,....The
pavises provided close quarter protection for the troops and gun crews
in the waist. They were removable, allowing archers and hand gunners
to fire out between them, and to allow borders to stream across onto
an opposing deck.
Source: Peter McElvogue, 'Tudor Warship Mary Rose' (2015)
Rupert Holland's Historic Ships refers specifically to Henry Grace à Dieu (or Great Harry), the ship which took Henry VIII from Dover to the meeting with Francis I at the Field of the Cloth of Gold:
It was usual for all vessels of that time to carry along their rails
rows of shields called a "pavese". On the Great Harry, these shields
or targets were displayed even around the tops. They were placed in groups of four, ornamented respectively with the following devices: the cross of St. George on a silver ground, a golden fleur-de-lys on a blue ground, the Tudor rose on a green and white ground, and a golden portcullis on a red ground.
As Henry was on a diplomatic mission, we can safely assume that the pavisade served more of decorative function on this occasion.
On the origins of the pavise:
Associated with the northern Italian town of Pavia — although perhaps
only in legend — it is generally thought that these shields originated
there sometime in the early to mid-thirteenth century.
Burgundian pavise from around 1480. Source: Medieval & Renaissance Material Culture
It was supposed to have been used by Genoese crossbowmen at the Battle of Crecy in 1346 but their pavises were still with the baggage train when the Genoese were ordered into battle and subsequently put to flight by the English longbowmen. They began to be adopted by the English within 20 years of Crecy.