As the complexity of business and boards is increasing the question of how to ensure that the governance is optimal is becoming more crucial. This guide outlines the pillars that are fundamental to an effective board of directors:
1. Board members clearly understand their roles and have the resources to do their work well.
Each director should be aware about what is expected of them as a member of the board and how their contributions contribute to helping the company work toward strategic goals and its mission. This clarity should be expressed in the director’s recruitment process and board refreshment as well as succession planning. It is crucial to have a board administrator, or a leader of your management team, who is committed to helping you to fulfill these responsibilities.
2. The board assesses its own performance, as well as the structures of other boards with which it interacts.
A regular review process for board members lets the board measure its performance against benchmarks in areas such as strategy, risk and oversight financial oversight, diversity and inclusion, and more. This can assist the board in identifying skills gaps and formulate a plan website link for addressing them.
3. Board members are always looking to hear new perspectives and points of view from various sources.
All directors should be willing to discuss issues with – instead of simply listening to presentations from the board’s independent advisors, management and employees as part of the board’s duties. Boards that are able to effectively solicit diverse perspectives including those of minorities and women are more likely to innovate and reduce blind spots.
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