The board of directors supervises the day-today operations and long-term plans of a company or non-profit organization. The board of directors is a group that has a fiduciary responsibility to shareholders and other stakeholders.
The board is responsible for selecting and supervising the chief executive officer and other management personnel. It also decides on and approves major shifts in the direction of a company. The board also provides advice to the CEO and the other executives on strategic goals and capital allocation. It also provides guidance on legal issues and risk management, since it is legally responsible for the highest-level decisions of a company.
It is essential for board members to live by the principles of collaboration and communication, which to build trust and ensure high-quality decision making. Board members should also have a record of leadership and governance skills. Additionally, it’s helpful for boards to have diverse gender and race, as well as age and geographical diversity so that they reflect the firm’s customers.
Finally, board members should be able to commit to a significant amount of their time. Over the last several decades directors of boards have reported spending more time on their roles. Therefore, it is essential that boards carefully consider candidates when selecting board members. This could include a formal orientation that helps new directors get an understanding of the mission, overview and the background of the company they will be serving on the board.
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