A board of directors is legally responsible for the most important decisions, which include the hiring and firing of the chief executive officer, overseeing strategic https://boardnearme.com/how-much-do-corporate-board-directors-get-paid/ direction, and ensuring the company’s objectives are met. The board is typically comprised of former and sitting executives, experts and respected persons selected from the general public (called outside directors), and it is also responsible for establishing corporate governance standards.

A well-functioning board has a clear purpose and is able to operate with open communication and respect for the diverse views of its members, and accountability to shareholders and other stakeholders. It also has independent board members who are not afflicted from conflicts of interest and take an opportune view of the future of the company. An orientation process that is formal, establishing relationships with other members, and committing to meet regularly are vital.

A good board member is not only smart in business, but also curious. They are able to ask thoughtful questions to the management and to other members which will challenge their thinking and lead to the best decisions. A board member’s experience in a specific field can be an asset.

Boards are increasingly taking up additional responsibilities such as strategic planning and managing resilience and risk. They also have to manage diversity and inclusion, as well as digitalization and technology. They must be more tech-savvy and play a bigger role in the hiring of CEOs and other senior leaders. According to McKinsey COVID-19, the pandemic taught boards to be more proactive when addressing issues and planning for the future.