A board of directors is a governing board of individuals who act as custodians of the interests of shareholders and ensure the long-term viability of an company. A solid board, comprised of people who have a wide range of expertise and skills is crucial for any business.
Traditionally, boards have supported and endorsed strategies proposed by executives while overseeing management teams. Today, however a well-designed board directors can provide leadership on key issues such as corporate strategy and vision, risk and opportunity management in addition to innovation, talent sustainability, and succession of leadership.
The board of directors of a business is typically comprised of both insiders and outsiders. An outside director is a person who is not employed by a company. To be considered an independent director the director must not have connections to the business in any way.
When you are putting your board together, take into consideration people who are passionate about the mission of your organization and have a vast industry knowledge. It’s also essential to have a mix of people with different skills who can provide creative problem-solving and innovative thinking. You should also look for experts in specific areas like marketing, finance, and capital raising.
It’s essential to know that as a member of the board, you have fiduciary responsibility and are legally accountable for the company’s decisions at a high level. If you’re shareholder, you have the right to vote on board members during proxy season. If you’re planning to vote for an incoming board member, carefully read the proxy papers and ensure that they’re independent.
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