A board of directors can help a company to perform more efficiently and effectively. They act as a check-and-balance on management, providing strategic guidance and oversight. They also assist in make sure that decisions are in the best interest of shareholders. They also help a company ensure compliance with the law and reduce risk. A board of directors can comprise inside or outside members dependent on the type of organization. An inside director will be an employee, whereas an outside director is a significant shareholder, or someone who has a good reputation in their field.
The role of the board of directors is to ensure that a business operates legally and in the best interest of all stakeholders, which includes employees, investors and suppliers/vendors. This is accomplished by formulating corporate strategies, establishing priorities, and providing critical input and constructive criticism regarding a wide range of issues including developing talent and culture sustainability, risk and resilience management, technology and digitization. A board of directors can become an integral partner to the CEO and entire management team by doing this.
For a person an individual, a spot on a board of directors is a highly respected job that can be a great addition to a resume and offers a unique opportunity to build leadership capabilities, increase understanding of the market and industry, strengthen networks and become a more effective decision taker in a group setting. It is essential that prospective directors are aware of their responsibilities and are willing to invest their time and energy in the job.