The Board of Directors and the Role They Play in a Company
The board of directors oversees the day-to-day operations and long-term strategies for a business or non-profit organization. It is the entity with a fiduciary duty to shareholders and other stakeholders.
The board decides on and supervises the chief executive officer and other management personnel. The board also approves and decides major changes to the direction of a company. The board also gives advice to the CEO and the other executives on the strategic goals and capital allocation. It also gives guidance on legal issues and risk management as it is legally accountable for the most important decisions of a business.
It is vital that board members embody the principles of collaboration and communication. These principles assist to create trust and ensure high-quality decision making. Board members must have experience in governance as well as leadership. It is also important that the board members reflect the company’s customers by incorporating a variety of genders, races and ages, as well as geographic diversity.
In addition, board members should be capable of committing to a substantial amount of time. The amount of time board directors report they spend in their roles has grown significantly in the last few years. Therefore, it is essential that organizations carefully evaluate candidates when selecting board members. This may include an formal orientation session that helps new directors gain a clear picture of the overview, objectives and the background of the company for which they will be serving on the board.