What Is a Board of Directors?
A board of directors is an entity that is responsible for the oversight of a business or nonprofit organization. It is responsible for determining the company’s governance as well as management and policies and is usually a mix of insiders familiar with the internal workings of the organization and qualified people who are not part of the organization but are experts in a particular subject. The board also elects officers such as presidents, and others who hold titles like vice-president, vice chair or a secretary/treasurer in a combination. A board may have strict rules for director conduct, and could also impose fitness to serve requirements. It is also able to fire directors and could be able to enforce disciplinary measures in the event of fiduciary duty violations or other misconduct.
In many ways, a board of directors is the central point of a company. It provides direction and oversight while the executive team and CEO focus on day-to-day issues and implement strategy. In a perfect scenario, a board would work with the CEO to grow the business while posing tough questions about the specifics of the business’s operations.
The ideal board members will possess an array of abilities and a strong desire for the success of the company. They must be able to learn quickly and think on their feet. They should have high emotional intelligence which allows them to react to situations and emotions in a manner that is supportive of the organization. They should also be able collaborate well with others.