A board of directors is the legal responsibility for making high-level decisions. This includes deciding to hire and dismiss the CEO, overseeing the strategic direction and making sure that the company achieves its objectives. The majority of them are ex- and current executives expert and respected individuals who are selected from the community (called outside directors), and it is responsible for setting the corporate governance guidelines.
A solid board has a clear and defined mission and operates with open communication and accepts a variety of viewpoints. It also holds itself accountable to shareholders and stakeholders. It also has independent directors who are not entangled in conflicts of interest and have a long-term view for the business’s success. An orientation process that is formal and establishing relationships with other members, and committing to meet regularly are vital.
In addition to having business acumen An effective board member has an intellectual curiosity and is capable of asking the management and other members of the board constructive questions click reference that challenge collective thinking and help make the best decision. Having niche experience like capital-raising or sales expertise, can also be an asset.
Boards are increasingly taking on more responsibilities, such as strategic planning, risk and resilience management as well as diversity and inclusion and technology and digitalization. In turn, they must be technologically adept and play an increased role in the hiring process and succession planning for the CEO and other leaders. According to McKinsey COVID-19′s pandemic taught boards to be more proactive when dealing with crises and planning for uncertainty.
