A board of directors is a group of elected directors who provide expert guidance and oversight for a business. The board is not a part of management and focuses on the most important issues than the day-to-day business. A company’s board has an obligation of fiduciary to ensure that the company operates lawfully and in the best interests of shareholders and other stakeholders.

A well-run board of directors must possess the right mix of leadership capabilities, governance expertise, and the experience to be an invaluable resource for the business. The board members must be more than “yes people” They should be able to stand up to managers when necessary and offer an alternative view. In addition to the governance aspect of an executive board, it’s important for boards to actively engage with its stakeholders including employees, customers, suppliers and communities that are impacted by the company’s operations and strategy.

A board will also decide on corporate policies and ensure the implementation of a strategic plan, and review its effectiveness. It will evaluate the CEO and participate with the CEO in the evaluations of senior management when necessary. A board can help the business establish relationships with stakeholders outside the company that are beneficial to the business. It will also communicate to shareholders and other investors on issues that affect the business mission and the financial performance of a company. This includes assessing the risk profile of the company’s finances and assessing the impact of global events like trade policy and geopolitical tensions.

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