A board of directors is a body that oversees and protects the long-term interests of its shareholders. Made up of highly skilled individuals with a range of abilities, a well-functioning board is crucial for every business.
Traditionally, boards have overseen the management boardable teams while also approving strategies proposed by executives of companies. A well-designed board can provide leadership that is proactive in key areas such as corporate strategy and vision risk and opportunities as well as sustainability, talent and succession of leadership.
The company’s board is typically comprised of both outsiders and insiders. Inside directors are executive of the company, while an outside director is not employed by the firm. To be considered an independent director, one should not have connection to the company in any way.
When you are putting your board together, take into consideration people who are passionate about the mission of your business and have extensive industry experience. In addition, it is important to have a mix of individuals with varying skill sets who can provide creative problem-solving, innovation, and strategic thinking. It is also important to look for specialists in specific areas in areas such as marketing, finance, or capital raising.
It is crucial to understand that you are legally accountable and have fiduciary responsibilities as an officer. In addition, if shareholder, you are entitled to the right to vote on board members during proxy season. If you’re considering voting on an incoming board member, be sure to read through their proxy materials and ensure they’re independent.