Many quotes remind entrepreneurs and managers that it’s a must to have a great team to build a successful company. The board of directors are accountable for the success of public companies.
The board is responsible for taking important strategic choices, like merging with another firm, buying or selling shares, and distributing dividends. It also manages high-level financial matters such as determining www.boardnearme.com/communicate-effectively-to-create-better-board-relationships/ the compensation of top executives, and approving or amending the annual budget. The board serves as a shield for the chief executive in emergency situations, by providing guidance.
In addition, a well-functioning board can be extremely valuable by acting as a sounding board for management giving objective feedback and providing constructive criticism. This is particularly crucial in businesses with a complex business model or highly restricted by law (like financial services and healthcare).
Boards are increasingly expanding their responsibilities, taking on matters like organizational culture and management of talent. They also need to spend more time away from formal meetings and be more digitally literate. Frithjof, a McKinsey senior consultant, explains that they should also promote a culture that is constantly learning.
As a result, it’s more crucial than ever that companies choose directors who are both competent and ethical. They must have a thorough understanding in the field of business they work in and be committed to the company’s mission. They should also have the ability to manage their time, which may include working on committees or acting as an ambassador for a company. They should be able to comprehend the importance of maintaining a balance between work and personal life.