A board of directors is an advisory body that assists a company in performing optimally. They are not a part of the management of the company and focus on making decisions that have an impact on stakeholders and shareholders. They also protect the company during times of crises. The structure of the board is different depending on the company’s article of incorporation and bylaws. Typically, it is comprised of non-management members elected for a certain period however, some companies choose to have terms that come to an end and begin at different points to ensure that there aren’t too many vacant seats at one time.
It’s important to select board members who have a variety of skills and backgrounds. The best boards are diverse and contain people from diverse genders, ethnicities, backgrounds and experiences. This gives a broader perspective to the table, which can help identify new opportunities and overcome challenges.
When you’re building your board, you should look for candidates with specific experience that can help drive business growth. For instance, a member with expertise in capital raising can help your company grow and make the most of market opportunities, while someone with a background in marketing can provide suggestions on how to position your brand on the market and increase sales. A board member with extensive financial or legal expertise can guide your company through complex situations. In addition to their responsibilities as legal fiduciaries good board of directors is also accountable for establishing the company’s strategy and providing oversight to ensure that the general manager and CEO are following the strategy.