A board of directors is a elected group of people who represent the interests of a company. The board comprises the chief executive officer (CEO), senior managers and prominent individuals who aren’t involved in the day-to-day activities. It supervises management and formulates high-level strategies. It meets regularly to review and monitor the performance of the company. It also approves major corporate transactions such as mergers, purchases stock splits, new products that are launched. The board also establishes policies on compensation for the CEO and other executives, ensuring they are in line with company goals. It also manages risks, and oversees the financial performance and operations which includes the preparation of annual budgets and reports.
A good board requires diverse perspectives and a broad range of knowledge. The most effective boards are proactive and engaged, addressing issues that could affect their company, like strategy and culture, leadership succession and talent management governance and risk digital transformation and sustainability, and possible mergers and acquisitions. They provide advice and oversight on these issues, while also ensuring the crucial line between their duties as a board and that of management.
To perform their duties and responsibilities The most efficient board members collaborate more closely with CEOs to understand the company’s strategies and vision, as well as the difficulties, as well risks and challenges. They are prepared to participate in a debate which focuses on strategic planning, oversight and accountability. They also make decisions in the best interests of the company’s goals while maintaining their independence and avoiding conflicts of interests.
