Board members and other stakeholders should be able comprehend the company’s objectives and strategies as well as risks. They should also understand their roles and responsibilities to ensure that the business is operating legally and in the best interest of shareholders, employees and all other stakeholders.
It is crucial to have a clear board structure that includes individuals with experience in governance and leadership and knowledge of your industry. The structure may comprise one that is a mix of executive (also called “inside directors”) and non-executive (also called independent directors) positions. It is vital that the board has a strong chair who can run meetings efficiently, promote the culture of feedback and trust and invest in education.
A board also has officers who are appointed or elected to specific positions, for example, vice-president and president. In addition, it’s typical for boards to have special committees focused on certain activities like audit and compensation.
Participating on a board requires an enormous amount of time and effort. However, it’s a great opportunity to gain valuable experiences in a group and to learn to think differently. Plus, you’ll receive pay and perhaps exciting benefits, such as the use of the company jet or other products.
Being on a board will provide you with an unique perspective that will be different from the job you play as manager. You will gain a new perspective on how an organization works. It will aid you in becoming an effective manager, as you will learn how to report to the board.