A board of directors is legally accountable for high-level decisions, including hiring and firing the chief executive officer, directing the strategic direction of the business, and ensuring that the company is able to meet its objectives. This group is usually comprised of former and current executives as well as experts and respected individuals selected from the wider community (called outside directors), and it is responsible for setting corporate governance practices.

A well-functioning board has a clear purpose and is open in its communication and accepts a variety of viewpoints. It also holds itself accountable to shareholders and stakeholders. It also includes directors who are independent who are not entangled in conflicts of interest and have a long-term vision for the company’s future. The importance of a formal orientation, establishing relationships with members, and meeting at the right time is vital.

A good board member is not only business-savvy, but also intellectually curious. They can ask insightful questions to the management and to other members that challenge their thinking and help them make the best decisions. Experience in a niche like capital-raising or sales knowledge, can also be an asset.

Boards are increasingly taking on additional responsibilities, such as strategic planning as well as risk and resilience management, diversity and inclusion, and technology and digitization. They should be more technologically knowledgeable, and play a larger role in the selection of CEOs and other top leaders. The COVID-19 pandemic has taught boards that they need to be more proactive in addressing emergencies and preparing for the possibility of uncertainty according to McKinsey.

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