A board of directors is an elected group that represents owners (shareholders) and provides direction and oversight to a business or organization. Depending on the kind of business entity, it could be traded on a stock exchange (public company) or privately held by family members or others (private or limited company) or regulated by law or public policy (commonly referred to as a municipal corporation) or exempt from taxation (nonprofit or tax-exempt).

The board’s role is to promote initiatives and activities that maximize the value of shareholder investments as well as protect financial interests. It also ensures that shareholders get accurate financial data and assists in the ongoing monitoring of risks.

Some boards focus on strategic issues such as the development of talent and culture Risk and resilience management as well as digitization and technology or potential mergers and acquisitions. Others concentrate on governance and oversight. The most effective boards go above and engage in more active and constructive discussion on these issues and providing input and positive feedback that aids management in making the best decisions.

Selecting the right people to join your board of directors is important. They must have the necessary skills, experience, passion, and character in order to bring value. They must also be able to understand and embrace the core values of your company. It is crucial to be able to act quickly and efficiently during crises. They should also be able offer a fresh perspective and a broad range of knowledge to help the CEO navigate difficult times.

Mastering Team Collaboration and Due Diligence with the Data Room Index