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A board of directors is a set of individuals that provide solid governance for an organization, including non-profits. They provide a high-level strategy and direction, protect the financial interests of the company and ensure that the organization has all the resources necessary to accomplish its goals. They also ensure that the business respects ethical and legal standards. In addition, boards are accountable for selecting corporate officers they also approve stock options and dividends and deciding on merger and acquisition offers. In a public corporation the board is legally required to represent the interests of shareholders and is the principal source of governance.

Boards are most effective if they exhibit these four characteristics Collaboration and Communication The board should actively engage in discussions and listen carefully to differing opinions so that it can make informed decisions. They must be able to effectively communicate with stakeholders, fostering positive relationships and ensuring that the organization’s actions are in line with the expectations of society.

Strategic vision The board must provide an outlook on the future, assisting the chief executive officer and other senior leaders to set strategic priorities. It should also be able determine the effectiveness of an organization’s strategies, and also provide an environment of support and encouragement that encourages innovation.

A good board will include members with expertise in governance, financial oversight, and legal issues as in other areas such as risk management, talent management, sustainability, digital transformation, and branding management. Depending on the organization’s needs the board could be comprised of employees, volunteers or even members selected by other shareholders.

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