Unlike an advisory board, your Board of Directors is real. They conduct real business, not just offer advice or counsel. They make decisions, mitigate risks, select executives and play many more critical roles than most companies truly recognize or appreciate. They are a legal governing body with fiduciary duties.
Listed below are just a few of the roles and responsibilities for your Directors:
- Promote the best interests of the company and the shareholders.
- Selection, development and replacement, if necessary, of the Chief Executive Officer.
- Succession planning for key leaders, such as President, CEO, COO, CFO and others.
- Compensation oversight and management for key leadership roles.
- Ensure compliance with controls, regulations, laws, and policies.
- Review and approve operating, financial and strategic plans and objectives.
- Identify key risks to the business and ensure adequate mitigation strategies are in place.
These are just a few of the key roles the Board of Directors should perform in your organization. Each organization is different and has specific needs, but if the Board is not challenging the leadership on a regular basis, it may be time to change up the Board.
Photo credit to Benjamin Child