A board of directors is a governing body of individuals who are the custodians of the interests of shareholders and ensure the long-term stability of an organization. A strong board made up of individuals who have a wide range of expertise and skills is vital for any business.
Traditionally, boards have overseen management teams while supporting and accepting strategies proposed by executives of companies. A well-designed board can now provide leadership that is proactive in key areas like corporate strategy and vision including risk and opportunity as well as sustainability, talent and leadership succession.
The board of directors of a company typically consists of both inside and outside members. Inside directors are executive of the company, while an outside director isn’t employed by the company. To qualify as an independent director, the person must not have any ties to the company.
When assembling your board, seek out individuals who are committed and experienced in your industry. It’s due diligence process also essential to include people with different skill sets and abilities, who bring problem-solving, and innovation along with strategic thinking. You should also look for experts in specific areas like marketing, finance, and capital raising.
It’s crucial to understand that as an official on the board you are a fiduciary and are legally accountable for the company’s highest-level decisions. If you are shareholder, then you also have the ability to vote for board members during the proxy voting season. If you are considering voting for a board member, be sure you go through their proxy documents carefully and make sure they are independent.