A board of directors is an organization of elected members who provide expert guidance and oversight for a business. The board is not a part of management and concentrates more on the big issues than the day-to-day business. The board of directors has an obligation of fiduciary to ensure that the company is operating lawfully and in the best interest of shareholders and other stakeholders.
A board that is successful will possess the right mix of leadership capabilities as well as governance expertise and experience that will serve as a valuable asset to the company. The board members must be more than “yes people,” they must have the ability to challenge management when necessary and present a different point of view. In addition to the governance responsibilities of the board, it is important for a board to actively engage with its stakeholders including employees, customers, suppliers and communities that are affected by the company’s operations and strategy.
A board will also decide operation of your corporate boards on company policies and oversee the implementation of a strategic plan and review its effectiveness. The board will also evaluate the CEO, and if needed, participate in senior management evaluations along with the CEO. A board will assist the company to establish relationships with stakeholders outside the company which can benefit the business. It will also communicate to investors and shareholders about matters affecting the business mandate and the financial performance of the business. This includes assessing the risk profile of the company’s financials, monitoring the impacts of global developments such as trade policy, and geopolitical tensions.