A board of directors is a set composed of individuals elected to provide expert guidance and oversight of the company. This group is independent of management and focuses on the company’s major issues and not the day-to-day activities. The board of directors has an obligation of fiduciary to ensure that the company’s operations are legal and in the best interests of shareholders and other stakeholders.
A successful board of directors will have the right mix of leadership skills as well as governance expertise and experience to act as an important resource for the business. The board members must be more than “yes people”; they should be able to challenge managers when necessary and offer an alternative viewpoint. A board shouldn’t just concentrate on its governance, but also interact with all stakeholders including employees, customers and suppliers, and communities, who are affected by the company’s business operations and strategy.
A board also sets corporate policies, supervise the implementation of strategic plans and monitor their effectiveness. The board will also be able to evaluate the CEO, and if needed, participate in senior management evaluations with the CEO. Additionally, a board can help the business establish relationships with stakeholders outside the company that are beneficial to the business. It will also communicate with investors, shareholders and shareholders about matters that affect the company’s business mandate and financial performance. This will read this include assessing a company’s financial risks, monitoring global developments such trade policies and geopolitical conflicts.