Four Qualities of a Strong Board of Directors

A board of directors is composed of people who provide solid governance to an organization. This includes non-profits too. They provide high-level direction as well as strategy, protecting the interests of shareholders’ financials and ensuring that the business has the resources it needs to achieve its goals. They also ensure that the company is in compliance with the law and ethical standards. Additionally, boards are responsible for choosing corporate officers, approving stock options and dividends and resolving merger and acquisition proposals. In a public company, the board is legally obligated to represent the interests of shareholders and is the primary source of governance.

In general, boards are most efficient when they have four fundamental qualities: Collaboration and Communication: The board should actively engage in discussions and take into consideration various perspectives to arrive at well-informed decisions. They must be able to effectively communicate with stakeholders in order to foster positive relationships while ensuring that the actions of the company are in line with society’s expectations.

Strategic vision The board must provide an outlook on the future, assisting the CEO and other top leaders to set strategic priorities. It should be able to identify and assess the effectiveness and efficiency of the organization’s plan, and provide a working environment that is supportive and constructive and encourages creativity.

A great board is comprised of members with expertise in financial and governance as well as legal issues. It could also include members with expertise in other areas like sustainability, talent management, and digital transformation. The organization that is responsible for the board will determine the board could consist of employees, volunteers or members elected by shareholders who are not shareholders.