There are numerous sayings that remind entrepreneurs and managers that it takes a team to build a great company. For public companies the board of directors is the most important team that is responsible for the success of the firm.
The board is responsible for making important strategic decisions such as merging with another firm or buying or selling shares, and distributing dividends. It also manages the financials at a high-level like setting compensation for top executives, and making changes to the annual budget. The board also acts as a bulwark in crisis situations, offering guidance to chief executives.
A well-functioning board adds tremendous value to the company by providing a sounding board to management, giving objective feedback, and offering constructive suggestions for improvement. This is particularly important for companies with a complex business or are heavily restricted (like healthcare or financial services).
In a growing number of cases, boards https://boardnearme.com/ are expanding their responsibilities to take on issues such as organizational culture and development of talent. This means that they have to be more tech-savvy and spend more time outside of formal meetings. Frithjof, a McKinsey senior consultant, states that they must also foster a culture of continuous learning.
This is why it’s more important than ever to ensure that companies select directors who are ethical and competent. They must possess a deep knowledge in the field of business they work in and a commitment to the mission of the company. They must also be able to manage the time commitment required, which may involve serving on committees as well as acting as an ambassador for the company. They should also be aware of the importance of ensuring a healthy balance between work and personal life.