A board of directors is an institution that is responsible for governing and protecting the long-term interests of its shareholders. Made up of highly skilled individuals with a range of abilities and experience, a strong board is vital for every business.
Traditionally, boards have overseen management teams while supporting and the approval of strategies proposed by executives of companies. A well-designed board can offer proactive leadership in crucial areas such as corporate vision and strategy including risk and opportunity as well as sustainability, talent and succession of leadership.
The board of directors of a business is typically composed of both insiders and outsiders. An outside director is one who is not employed by a business. To be considered an independent director one should not have significant ties to the company.
When putting your board together, take into consideration those who are committed to the mission of your business and have extensive industry experience. It is also important to have a Board Report mix of individuals with varying skill sets who are able to provide innovative problem-solving as well as strategic thinking. You should also search for experts in niche areas, such as marketing, finance or capital raising.
It’s essential to know that as an official on the board you are a fiduciary and are legally responsible for the company’s top-level decisions. If you are shareholder, you are also entitled to cast a vote for board members during proxy voting season. If you’re considering voting for a board member, be sure to go through their proxy documents carefully and make sure they are truly independent.
