The Importance of a Strong Board of Directors

A board of directors is legally accountable for decisions at a high level, including hiring and firing the chief executive officer, directing strategic direction, and making sure www.boardnearme.com/best-online-fundraising-platform-for-your-nonprofit/ the company’s objectives are met. This group often consists of executive officers, both sitting and former, experts and respected persons selected from the larger community (called outside directors) and is the one who sets the corporate governance guidelines.

A strong board has a clear and defined mission and operates with openness to communications and respects the diversity of opinions. It is also accountable to stakeholders and shareholders. It also includes independent directors who are not entangled in conflicts of interest and who have a long-term vision for the company’s success. The importance of a formal orientation, establishing relationships with members, and arranging meetings on the right time is essential.

A good board member is not only smart in business, but also curious. They are able to ask thoughtful questions to the board and to other members that will challenge their thinking and lead to the most effective decisions. Having niche experience, such as capital-raising or sales experience can be a great advantage.

Boards are increasingly taking on more duties, including strategic planning managing risk and resilience as well as diversity and inclusion and technology and digitization. In turn, they have to become digitally knowledgeable and have an increased 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 when dealing with crises and planning for uncertainty.