A board of directors is the group of people elected to represent shareholders acting as fiduciaries, making decisions and directing a company. They set the policy and are separate from the day-to-day operations. They set high-level strategies, and assist the senior managers by guiding them and guiding them in their work. They also play a key role in managing crises.
The role of the board varies by organization but generally involves protecting shareholder interests and encouraging efforts to maximize value. It ensures that shareholders are provided with accurate and timely information, and ensures transparency when it comes to financial reporting and disclosure. It manages risk and actively engages stakeholders to foster good relations and ensure that corporate behavior aligns with societal expectations.
The selection of the right members to serve on your board is vital to the overall success of your organisation. It is essential to select people who have the right blend of leadership, governance, and business expertise to provide strategic direction and oversight. They should be able to effectively listen to diverse perspectives and engage in constructive debate and be a reflection of the values that define your organization.
Additionally, it’s a good idea to create a board that is as diverse as it is possible and to have a diverse number of directors so that ties when the vote on important issues can be broken. Smaller companies typically pick five to seven directors boardroomtoday.net while larger companies should try to have a minimum of 9 to 11 board directors.