A board of directors is a body that is responsible board of directors for governing and protecting the long-term interests of its shareholders. A well-functioning board, made up of individuals with a variety of skills and experiences is crucial to any business.
Traditionally, boards have supported and approved strategies proposed by managers while overseeing their management teams. Nowadays a well-designed and well-planned board of directors can offer proactive leadership on key issues such as corporate strategy and vision the management of risk and opportunity, innovation, talent, sustainability, and succession of leadership.
The board of directors of a company is usually made up of both insiders and outsiders. An outside director is a person who is not employed by a firm. To qualify as an independent director, the person must not have any connection to the firm.
When assembling your board seek out people who are passionate and knowledgeable about your field. It’s also important to include people with diverse skills, who can bring creative problem-solving and innovation as well as strategic thinking. You should also search for experts in niche areas in areas such as marketing, finance or capital raising.
It’s vital to recognize that as a member of the board you are a fiduciary and are legally responsible for the company’s high-level decisions. In addition, if a shareholder, you have the right to vote on board members during the proxy season. If you’re thinking of voting for an unpopular board member, carefully read through their proxy materials and make sure they’re truly independent.
