A board of directors bears legal responsibility for making high-level decisions. This includes the hiring and firing of the CEO, directing the strategic direction of the business and ensuring that the company meets its objectives. The board of directors is https://boardnearme.com/how-to-operate-with-data-room-due-diligence/ comprised of experts, respected people and former executives chosen from the community. They are accountable for setting the corporate governance.
A strong board has a clear mission, operates with open communications and respects the diversity of opinions. It also holds itself accountable to shareholders and stakeholders. It also includes independent directors who are free of conflicts of interest and have an outlook for the long-term company’s success. Having a formal orientation process and establishing relationships with other members, and agreeing to meeting promptly are crucial.
A good board member is not just knowledgeable about business, but also curious. They are able to ask constructive questions to the board and to other members which will challenge their thinking and lead to the best decisions. A niche expertise, such as capital-raising or sales expertise is also an advantage.
Boards are increasingly assuming more responsibilities like strategic planning and managing resilience and risk. They also have to manage the issue of diversity and inclusion, technological advancements and digitalization. As a result, they must be digitally literate and have an increasing role in the hiring process and succession planning for the CEO and other senior leaders. The COVID-19 pandemic has taught boards that they need to be more proactive in dealing with uncertainties and crises, according to McKinsey.