The board of directors manages the day-to-day operations as well as long-term strategies for a business or non-profit organisation. It is the board that is accountable to shareholders and other stakeholders.
The board supervises and selects the chief executive, along with all other management personnel. It also decides on and approves major shifts in the direction of a company. The board also gives advice to the CEO and the other executives regarding strategic goals and capital allocation. It also gives guidance on risks and legal issues since it is legally responsible for the most crucial decisions of a business.
It is vital that board members abide by the principles of collaboration and communication. These principles help to establish trust and ensure the highest quality of decision making. Board members must have a track record of leadership and governance expertise. It is also important that the board members reflect the needs of the customers by having a mix of races, genders, ages, and geographical diversity.
Additionally, board members must be capable of dedicating to a significant amount of their time. In the past few years board members have been reported to spend more time on their roles. Therefore, it is essential that organizations carefully evaluate candidates when selecting board members. This may include a formal orientation session to ensure that new directors have a an understanding of the overall picture of the company as well as its goals and its history.