A board of directors is a governing board of people who act as guardians of shareholders’ interests and ensure the long-term viability of an organisation. It is composed of highly experienced people with a wide range of expertise, a well-functioning board is vital for every business.
Traditionally, boards have supervised the management teams while also accepting strategies proposed by company executives. Now, however a well-designed and well-planned board of directors can be proactive on major issues, such as corporate strategy and vision the management of risk and opportunity, innovation, talent, sustainability, and succession of leadership.
A company’s board typically consists of both outside and inside members. An outside director is one who is not employed by a business. To be considered an independent director one must not have material ties with the company.
When you’re assembling your board, seek out individuals who are committed and experienced in your industry. It’s also essential to include a mix of people with different skill sets who can provide creative problem-solving and innovative thinking. It is also important to look for those with specializations such as finance, marketing and capital raising.
It is important to realize that you’re legally responsible and are obligated to be a fiduciary as an officer. If you’re shareholder, you have the right to vote on board members during the proxy season. If you are considering voting for a board member, make sure you review their proxy papers carefully and ensure they are truly independent.
