A board of directors is a set comprised of shareholders who are elected to represent the interests of a company. The board is comprised of the CEO, senior managers, and other notable people who aren’t directly involved in the day-today business operations. It oversees management and establishes high-level strategies. It meets regularly to review and monitor performance. It also approves and ratifies significant corporate transactions like mergers and acquisitions, stock splits as well as new product launches etc. The board also sets the compensation policies for CEOs and other executives, ensuring they are in line with company goals. It also manages risk and oversees the operational and financial performance which includes preparing annual budgets and reports.

A strong board requires a variety of perspectives and a wide range of knowledge. The best boards are active and proactive, taking on issues which could impact their business, including strategy and culture, succession to leadership and management of talent governance and risk sustainability and digital transformation, as well as possible mergers and acquisitions. They provide advice and oversight on these issues while maintaining the critical distinction between their duty as a board member and management.

To carry out their duties and responsibilities effectively most effective board members work more closely with the CEO, allowing them to better understand the company’s strategy and vision and the challenges and risks. They are prepared to participate in a meaningful debate that focuses on strategic planning, oversight and accountability. They also make decisions based on the company’s best interests while maintaining autonomy and avoiding conflicts of conflict of interest.

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