A board of directors is a elected group of people who offers expert guidance and oversight to businesses. The board is independent of management and focuses on the most important issues facing the business instead of day-to-day operations. A company’s board is responsible for ensuring that the business is operating in accordance with law and in the best interests of its shareholders and other stakeholders.
A successful board will have the right combination of leadership abilities as well as governance expertise and experience that will serve as a valuable asset for the company. Board members should be more than “yes people,” they must have the courage to challenge management when necessary and provide an alternative point of view. A board must not just focus on its governance, but also engage with all stakeholders including employees, customers and suppliers, as well as communities who are impacted by the company’s operations and its strategy.
The board will also establish company policies, ensure the implementation of strategic plans, and also monitor their effectiveness. It will also evaluate the CEO’s performance and also participate with the CEO in the evaluations of senior management if appropriate. The board can also help the company build relationships with stakeholders outside the company who are beneficial to the business. It will also communicate to investors and shareholders about matters that impact the business mission and the financial performance of the business. This includes assessing the risk profile of the company’s finances, monitoring the impact of global events such as trade policy, and geopolitical tensions.
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