It is not for everyone to assume the role of a board member however, it is an excellent opportunity for learning about the best practices in governance and gain exposure to a wider community. It’s especially beneficial for young people looking to advance their career because they will learn to make group decisions instead of making them on their own. It also helps them to develop a better understanding of the importance of effective communication, which makes them better future managers.
A board is composed of a group of individuals who each have their own expertise. Although each position has distinct duties, they all share three fundamental legal obligations that are important to meet:
The shareholders’ interests are protected. A board is responsible to ensure that the business operates in a manner that maximizes the value of its shares. It is also important that shareholders are informed promptly about any security or financial threats that could impact their investments.
Setting up policies that provide financial oversight. Boards are responsible for establishing policies that assist an organization to track its expenses, assess how closely its spending matches its budget, and also monitor any loss, theft, or confusion.
Conducting an annual self-assessment. A board is responsible for conducting an annual review of its performance to assess whether its members are performing effectively. This can include checking a board’s capacity to manage risk, establish goals and recruit new members to fill gaps in its knowledge.
Facilitating meetings – A board must make sure its members can attend regular meetings and engage in productive discussions. This includes using top board management software to facilitate communication between board members and ensure efficient meetings.