What is the main role of the board in a company?
How efficiency of the board room meeting influences the success of the whole company?
Board of directors and its functions
The board of directors plays a key role in all aspects of corporate governance, starting with the definition of the right “tone from above” to ensuring and monitoring business controls, with the encouragement of appropriate behavior to direct and transparent interaction with all interested parties.
Data processes can sometimes be unrelated, so the role of the board of directors is to apply the correct risk lens to every decision and action. For the effectiveness of this process, the composition of the board should include relevant people – promising, experienced, inquisitive, who have time to understand the risk landscape in their legal and ethical responsibilities.
Effective boardroom meeting as a key to company’s success
Given the significant role of the board, the benefits of boardroom meetings can not be overestimated. Below, you will find some important advantages of leading an effective boardroom meeting and discover how exactly the board of directors can influence the professional life of the company and its success.
Establish your mission and approach.
It is the board’s obligation to develop and approve a mission and strategy statement that articulates the organization’s goals and methods for accomplishing those goals.
What is more, boards provide a vehicle for constituents, who may supply the organization’s mandate, to have a say in strategy development and programming monitoring.
Once the purpose and strategy have been established, it is the board’s responsibility to ensure that the organization’s initiatives contribute to the strategy. When the need for a mission and strategy shift is apparent, the board has a role in establishing the new vision.
Select, support and evaluate the CEO
Boards must agree on the CEO’s duties and they should perform a thorough search to select the best suitable candidate for the role. The board should also design and manage a succession strategy for replacing an executive in case of his or her departure.
Furthermore, the board should guarantee that the future executive director has the moral strength and professional skills to advance the organization’s goals.
Establish effective planning.
In terms of long-term strategic planning and yearly work planning, boards must participate in an overall planning process. The board should help monitor the organization’s performance towards established goals and manage the plan.
Provide software and service supervision
It is the board’s accountability to identify whether initiatives are consistent with the organization’s goal and to monitor their efficacy, requesting performance reviews and modifications as needed.
Supervise and coordinate financial management and asset protection
The board must help to design and approve an annual budget that supports the organization’s work objectives and ensures suitable financial controls are in place to preserve the organization’s assets.
The board is responsible for selecting an auditor and reviewing and responding to audit reports on an annual or biannual basis.
Ensure adequate financial resources
The board is responsible for assisting the executive team in securing appropriate resources for the organization to meet its objective.
Form and maintain a competent board
All boards must specify qualifications for applicants, assess and maintain desirable skill sets on the board, orient new members, and evaluate their own performance on a regular and comprehensive basis.
Improve the reputation of the company
The board should act as ambassadors for the organization, communicating the significance of the purpose and the value of the organization’s activities.
The board should endeavor to gain community support, including important stakeholders such as the government, like-minded groups, and donors.
Ensure legal and ethical compliance
The board sets the tone for the company’s business and should express its principles and beliefs. It is also responsible for adherence to legal standards and ethical norms.