A board of director has legal responsibility for making top-level decisions. This includes appointing and firing the CEO, directing the strategic direction of the company and ensuring that the business is meeting its goals. The majority of them are former and current executives and experts, as well as respected people who are chosen from the wider community (called outside directors) and is the one who sets corporate governance practices.
A solid board has a clear mission and operates with openness to communication and respects diverse viewpoints. It also holds itself accountable to shareholders and stakeholders. It also has independent directors who are not entangled in conflicts of interest and have a long-term vision for the company’s future. An orientation process that is formal and building relationships with other members, and committing to meet on time are key.
A good board member is not just skilled in business, but also curious. They can ask insightful questions to management and to other members which will challenge their thinking and help them make the right decisions. Experience in a niche, such as capital-raising or sales experience can be an advantage.
Boards are increasingly assuming additional responsibilities such as strategic planning and managing resilience and risk. They must also deal with the issue of diversity and inclusion, technological advancements and digitalization. They need to be more technologically literate, and have a greater part to play in the hiring of CEOs and other senior leaders. According to McKinsey COVID-19, the pandemic made boards more proactive when it comes to addressing issues and planning boardnearme.com for the future.