Board Management Principles

A board’s role is to provide guidance and oversight of the executive management team. They also ensure that the company’s policies are in place and that all fiduciary obligations are fulfilled. Some boards give too much power to the executive leadership. The majority of boards do not. The media is full of stories about business failures caused by incompetent or corrupt management teams.

One of the best ways to avoid issues is to make sure that your board has a broad range of expertise and perspectives and is able to work well as a group. This requires the establishment of rules of management for the board like embracing different perspectives and assuming leadership positions, fostering an flexible structure (e.g. setting up committees to deal with new risks) and engaging in continuous evaluation of the board and its individual members.

Another board management principle is to not be too involved in the day-today activities of your business. This is due to the fact that a large part of the work of a board is to set the long-term vision of your company and how it will fit to the larger society.

Although this might seem like a no-brainer, many companies struggle with this concept. Certain board members, for instance, start direct meetings with management without the CEO’s knowledge or make quick decisions to be useful. This can put the CEO in a precarious position. In the ideal scenario, the CEO will work with the board chair and other https://contactboardroom.com/data-synchrony-shaping-business-requirements-with-vdrs/ directors to resolve this issue and establish trust again.