Many of the sayings remind entrepreneurs and managers that it is essential to have a strong team to build a successful company. The board of directors are accountable for the success of public companies.
The board is accountable for making important strategic decisions, like merging with another firm purchasing or selling shares, or declaring dividends. It also oversees financial matters at the highest level, such as setting compensation for top executives or approval of the annual budget. The board also serves as a shield in emergency situations, providing direction to chief executives.
Additionally, a functioning board can provide tremendous value in the form of a sounding board for management, providing objective feedback and providing constructive criticism. This is particularly crucial for companies with complex operations or are heavily controlled (like healthcare or financial services).
As boards expand, they are increasing their responsibilities and are now able to tackle issues such as organizational culture and talent development. They also have to spend more time outside of formal meetings and become more technologically proficient. Frithjof, a McKinsey senior consultant, states that they must foster a culture of continuous learning.
It’s more crucial than ever that directors are both competent and ethical. They must have deep expertise within the industry of the company and a commitment to the company’s goals. They must also have the ability to manage their time, which may include participating in committees or acting as an ambassador for a company. They should also appreciate the importance of a healthy balance in a board member’s professional and personal lives.
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