A board of directors is legally responsible for high-level decisions, including hiring and firing the chief executive officer, directing strategic direction, and making sure the company meets its goals. The board consists of respected experts and former executives chosen from the community. They are accountable for setting corporate governance.
A well-functioning board is one that has a clear goal and is open to communication and respect for the diverse views of its members and accountability to shareholders and stakeholders. It also includes independent board members who are not more helpful hints afflicted from conflicts of interest and have an opportune view of the company’s future. The importance of a formal orientation, establishing relationships with members, and meeting at the right time is paramount.
A good board member is not only business-savvy, but also intellectually curious. They are able to ask thoughtful questions to the management as well as to other members which will challenge their thinking and lead to the best decisions. A board member’s expertise is a significant asset.
Boards are increasingly taking on more duties, including strategic planning and risk and resilience management as well as diversity and inclusion and technology and digitalization. In the process, they need to be more technologically adept and play an increased role in hiring and succession planning for the CEO and other top leaders. The COVID-19 pandemic has taught boards to be more proactive in addressing crisis and preparing for uncertainty, according to McKinsey.
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