A board of directors is legally responsible for decisions at a high level, including the hiring and firing of the chief executive officer, directing strategic direction, and making sure the company meets its goals. This group often consists of ex- and current executives and experts, as well as respected people selected from the community (called outside directors) and is the one who sets corporate governance practices.
A strong board has a clear purpose and is open in its communication and respects diverse viewpoints. It also holds itself accountable to shareholders and stakeholders. It also has independent directors who are free of conflicts of interest and have an outlook for the long-term company’s growth. An official orientation process, establishing relationships with other members, and agreeing to meet regularly are vital.
A good board member is not only business-savvy, but also intellectually curious. They are able to ask thoughtful questions to the management and to other members that will challenge their thinking and help them make the right decisions. A niche expertise like capital-raising or sales knowledge can be a great asset.
Boards are increasingly assuming additional duties, including strategic planning as well as risk and resilience management as well as diversity and inclusion https://boardnearme.com/communicate-effectively-to-create-better-board-relationships/ and technology and digitization. They should be more technologically proficient, and play a greater role in the selection of CEOs and other top leaders. The COVID-19 virus has taught boards that they need to be more proactive in addressing crises and preparing for uncertainty, according to McKinsey.