A board of director has legal responsibility for making high-level decisions. This includes the hiring and firing of the CEO, overseeing the strategic direction and read ensuring that the company meets its goals. The board consists of respected and knowledgeable individuals and former executives who are selected from the community. They are responsible for establishing the corporate governance.
A strong board has a clear mission and operates with open communication, and is open to different opinions. It is also accountable to its shareholders and other stakeholders. It also includes independent board members that are free from conflicts of interests and take an optimistic view of the company’s future. An official orientation process as well as establishing relationships with other members, and agreeing to meet on time are key.
A good board member is not only skilled in business, but also curious. They are able to pose constructive questions to the management as well as to other members that will challenge their thinking and lead to the most effective decisions. Experience in a niche, such as sales or capital-raising expertise can be an advantage.
Boards are increasingly assuming more responsibilities like strategic planning and risk and resilience management. They also have to tackle issues related to diversity and inclusion, as well as technological advancements and digitalization. This means that they need to be more technologically proficient and play an increasing part in hiring and succession planning for the CEO and other top leaders. According to McKinsey, the COVID-19 pandemic has taught boards to be more proactive in addressing crisis and preparing for uncertainty.