A board of directors is a governing board of members who serve as custodians of the interests of shareholders and ensure the long-term stability of an business. Comprised of highly experienced individuals with a variety of skills and experience, a strong board is essential to every business.
Traditionally, boards have overseen the management teams while also approving strategies proposed by executives of companies. A well-designed and crafted board can provide proactive leadership in key areas such as corporate vision and strategy including risk and opportunity, talent, sustainability and leadership succession.
The company’s board is usually made up of both insiders and outsiders. Inside directors are company executive, whereas an outside director isn’t employed by the firm. To be considered an independent director one must not have any material ties with the company.
When you are putting your board, you should consider people who are devoted to the goals of your company and have extensive industry experience. It is also essential to have individuals with a range of skills that can bring innovative problem-solving and creativity as well as strategic thinking. You should also seek out individuals with specialized expertise like marketing, finance, and capital raising.
It is important to realize that you are legally responsible and are obligated to be a fiduciary as board members. In addition, if you’re a shareholder, you have the right to vote on board members during the proxy season. If you’re considering voting for the board, make sure you review their proxy papers carefully and make sure they are independent.
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