A board of directors has legal authority to make high-level decisions. This includes the hiring and firing of the CEO, overseeing the strategic direction of the business and ensuring that the business is meeting its objectives. The board is typically comprised of former and sitting executives and experts, as well as respected people selected from the wider community (called outside directors) and is responsible for setting the guidelines for corporate governance.

A strong board is one that has a clear goal and operates with open communication and respect for different viewpoints and accountability to shareholders and stakeholders. It also includes independent board members who are unaffected from conflicts of interests and take a long-term perspective on the company’s future. A formal orientation process and building relationships with other members, and committing to meet promptly are crucial.

A good board member is not only smart in business, but also curious. They are able to ask thoughtful questions to the management and to other board members that challenge their thinking and help them make the right decisions. Experience in a niche like capital-raising or sales expertise can be an asset.

Boards are increasingly assuming additional responsibilities, such as strategic planning as well as risk and resilience management as well as diversity and inclusion and technology and digitalization. They must be more technologically knowledgeable, and play a larger role in the hiring process of CEOs and other top leaders. According to McKinsey COVID-19’s pandemic taught boards to be more proactive in addressing issues and planning for the future.

better board relationships