A board of directors is a body that is responsible for governing and protecting the long-term interests of its shareholders. A strong board comprised of people with diverse expertise and experience, is essential for any business.
Traditionally, boards have supervised management teams, while also the approval of strategies proposed by company executives. However, today a well-designed and well-planned board of directors can be proactive on major issues, such as corporate strategy and vision the management of risk and opportunity and innovation, as well as talent sustainability, and succession for leadership.
A company’s board typically consists of both inside and outside members. Outside directors are those who is not employed by a business. To be considered an independent director one must not have any connections to the business in any way.
When putting together your board, consider people who are passionate about the mission of your business and have a vast industry knowledge. It’s also essential to include people with a variety of skills and who are able to bring creative problem-solving and innovation along with strategic thinking. It is also important to look for experts in niche areas in areas such as finance, marketing, or capital raising.
It’s important to realize that as a member of the board you are bound by fiduciary responsibilities and are legally responsible for the company’s top-level decisions. If you’re a shareholder, you have the right to vote on board members during proxy season. If you’re considering voting for a new board member, make sure you read the proxy documents and make sure they’re truly independent.