A board of directors is a group of individuals who provide strong governance for an organization, including non-profits. They offer high-level direction and strategy, protecting the interests of shareholders’ financials and ensuring that the business has the resources to fulfill its mission. They also ensure that the business is in compliance with laws and ethical standards. Boards are also responsible for determining corporate officers, approving dividends as well as stock options, and responding to proposals for mergers and acquisitions. In a public company the board is legally required to represent shareholders’ interests and is the principal source of governance.
Boards are most effective if they embody these four qualities Collaboration and Communication The board should actively participate in discussions and pay attention attentively to the different perspectives so that it can make informed decisions. They must also communicate with stakeholders effectively and build positive relationships while ensuring that the actions of the company are in line with society’s expectations.
Strategic vision: The role of the board is to provide a long-term outlook which can help the CEO and other senior leaders determine the strategic direction of the company. It should also be able to determine and assess the effectiveness of the organization’s strategies, and provide an environment that is supportive and constructive that encourages innovation.
A good board will comprise members with expertise in governance and financial oversight, as well as legal issues as well as a range of other areas, including risk management, talent management sustainability, digital transformation and branding management. Depending on the organization’s needs the board can be made up of employees, volunteers, or members chosen by other shareholders.