A board of directors is a governing group of individuals who are the custodians of shareholders’ interests and safeguard the long-term success of an organization. Comprised of highly experienced individuals with a range of talents, a well-functioning board is vital for every business.
Traditionally, boards have endorsed and approved the strategies of executives while directing management teams. A well-designed board is now able to offer proactive leadership in crucial areas such as corporate vision and strategy including risk and opportunity in the areas of talent, sustainability, and leadership succession.
The board of directors for a company is usually comprised of both outside and inside members. An outside director is a person who is not employed by a company. To be considered an independent director, one must not have any material ties with the company.
When putting together your board, consider those who are committed to the mission of your organization and have a vast industry knowledge. In addition, it is important to include a mix of people with different skill sets that can contribute to creative problem solving as well as strategic thinking. You should also look for individuals with specialized expertise like marketing, finance, and capital raising.
It’s essential to know that as a board member you are accountable to the fiduciary and are legally responsible for the company’s highest-level decisions. Additionally, if you’re shareholder, you have the right to vote on board members during the proxy season. If you’re planning to vote for the appointment of a new board member, take your time reading through their proxy forms and make sure they’re independent.
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