A board of directors is a governing body of individuals who act as custodians of shareholders’ interests and ensure the long-term viability of an company. Made up of highly skilled individuals with a variety of skills, a well-functioning board is essential for any business.
Traditionally, boards have overseen management teams, while also accepting strategies proposed by the company’s executives. A well-designed board is now able to provide a proactive leadership in important areas such as corporate strategy and vision including risk and opportunity as well as sustainability, talent and leadership succession.
A company’s board typically consists of both inside and outside members. Outside directors are those who is not employed by a business. To qualify as an independent director, a person must not have any significant ties to the firm.
When you are putting your board together, think about people who are passionate about the mission of your organization and have a wealth of industry experience. It’s also important to have people with diverse skills that can bring innovative problem-solving and innovative thinking along with strategic thinking. You should also look for people who have niche expertise such as finance, marketing, and capital raising.
It’s crucial to understand that as a board member, you have fiduciary responsibility and are legally responsible for the company’s high-level decisions. In addition, if shareholder, you are entitled to the right to vote on board members during the proxy season. If you’re considering voting for the appointment of a new board member, take your time reading through their proxy forms and ensure that they’re independent.
