A board of directors is an elected group of individuals who represent the interests of a company. The board includes the CEO, senior managers, and other notable people who aren’t involved in day-to-day business operations. It oversees management and establishes high-level strategies. It meets regularly to review and evaluate the performance of the company. It also approves major corporate transactions, such as mergers, purchases as well as stock splits and new launches of products. The board also decides on the compensation policies for the CEO and other executives, and ensures they are in line with organizational goals. It also manages risk and oversees operational and financial performance and budgets, as well as preparing annual budgets and reporting.
A good board requires a variety of perspectives and knowledge. The most effective boards are engaged and proactive in addressing issues that could affect their organizations, including strategic focus, culture, leadership succession and management of talent, governance and resilience, risk, digital transformation, sustainability as well as potential mergers and acquisitions. They provide advice you can find out more and oversight on these issues, while ensuring the essential distinction between their responsibility as a board and management.
To fulfill their roles and responsibilities the most effective board members work closely with CEOs in order to understand the company’s strategy goals, vision, and difficulties, as well challenges and risks. They are able to engage in a thoughtful debate which focuses on strategic planning as well as oversight and accountability. They make decisions that are in the best interest of the company, while maintaining their independence and avoiding conflicts of interests.
