A board of directors bears legal responsibility for making high-level decisions. This includes deciding to hire and dismiss the CEO, overseeing the strategic direction of the company and ensuring that the business is meeting its goals. The board is typically comprised of former and sitting executives as well as experts and respected individuals who are selected from the wider community (called outside directors) and is accountable for establishing corporate governance practices.

A well-functioning board has a clear purpose and operates with openness to communication and respects diverse viewpoints. It also holds itself accountable to stakeholders and shareholders. It also includes independent board members that are free from conflicts of interest and who have an https://boardnearme.com/communicate-effectively-to-create-better-board-relationships/ overall view of the company’s future. A formal orientation process and building relationships with other members, and agreeing to meeting regularly are vital.

In addition to business acumen An effective board member has intellectual curiosity and is able to ask management and other members constructive questions that challenge collective thinking and assist in making the most appropriate decision. A board member’s niche experience can be an asset.

Boards are increasingly taking up new responsibilities, including strategic planning, managing resilience and risk. They also have to deal with diversity and inclusion, as well as digitalization and technology. They should be more technologically literate, and play a greater role in the hiring of CEOs and other top leaders. The COVID-19 virus has taught boards that they need to be more proactive in tackling crisis and preparing for uncertainty, according to McKinsey.