Choosing a Board of Directors

A board of directors is accountable for managing a business entity, whether it’s a private or public company, business trust, coop, or a family-owned entity. Its members can be elected (bylaws or articles of incorporation) or appointed by shareholders. They usually receive compensation for their services, either with a salary or as a part of an option plan for stock. They are able to be removed from their positions by shareholders or in instances of fiduciary duty violations for example, selling board seats to outside interests and attempting to influence votes in favor of their own companies.

Effective boards balance the concerns of stakeholders with management’s vision. They are comprised of members from inside and outside the company. They are usually chosen because of their expertise in the field and experience, ensuring that they have the right skills to effectively steer the company. They must be able and assess risks, formulate strategies to minimize them and monitor the performance of the management.

When deciding on new boardable features and comparison members to join your board, be sure to take into account the time commitment they’ll have outside of their work. It is also important to know their availability and if they are in a conflict of interests. Detailed meeting minutes are essential to ensure that all board members are aware their roles and responsibilities, while ensuring accountability for all decisions. It is also essential to establish a list of potential candidates early on, and to make sure that you are able to spread the word about board post. This will allow you to identify candidates who are qualified before their period is over, and avoid a delay in strategy.