21 Apr Who Are The Board of Directors and Why Are They Important?
Most times, large organizations and corporations will have an established board of directors to help assess their business and establish successful growth. As an Executive Search Firm, Scion Executive spends countless hours working with the board of directors to ensure a successful match for their organization’s new leader. We’re sharing the who and why a board of directors is important to an organization’s success!
What is the Board of Directors?
A board of directors is essentially a panel of individuals who are elected to represent shareholders. Every public company is required by law to install a board of directors; nonprofit organizations and many private companies – while not required to – also name a board of directors. An executive board is responsible for the oversight of the corporation or organization, protecting shareholders’ interests, establishing policies, as well as making decisions about important issues that a company or organization may face including policies or an employee.
Role of the Board Directors
The primary function of a board of directors is to act in the best interest of the corporation or organization. The board has three main responsibilities: 1) ensuring that all corporate activities are carried out according to state laws and regulations, 2) setting high standards for ethical behavior, and 3) providing strategic direction to the management team. The board of directors exists for two purposes: one, to oversee and direct the affairs of the corporation or organization, and second, to protect shareholders from any potential harm caused by the actions of management. If you’ve ever been frustrated by executives behaving outside of ethics, it’s time to look at your board of directors. It may be time to consider replacing them.
What to look for when recruiting a board member
There are a few important keys to remember when recruiting for your board positions. You’ll want your members to have one or more of the following:
- Expertise in a specific area which can help your corporation. Corporations may want to include an attorney to their board for their knowledge.
- You’ll want someone with leadership and management experience, particularly in a related business. This will open your network and connections.
- Commitment to your organization and/or business. You’ll want to seek out members who are interested in your business duties and its continued well-being. Most importantly, they should not be serving just for the money, business assets, or for personal interests.
- Devoted time and energy for board duties. Board members are expected to spend time preparing for and attending board meetings as well as serve on additional committees. Maybe the most important thing you’ll want in your board member is integrity and a lack of conflict-of-interest. In general, you’ll want your board members to sign a conflict-of-interest statement to ensure that they stay loyal.
Scion Executive Search can help you find your next business leader
Overall, a board of directors serves as an essential asset to your organization, if you are strategic in how you choose the individuals to serve on your board. Should you and your board be ready to partner with Scion Executive Search to launch an executive search in any one of our specialty divisions to find your next leader, we are thrilled to assist and answer your questions. Learn more today.