The role of a board is to oversee an business’s strategic goals, and also delegate day-to-day operations to a executive team. Many business owners fail to understand how a board can be effective, particularly when they’re strong-willed and determined to run the show themselves.
The number of searches for board governance tips is increasing, indicating that this subject is vital for business leaders of today. This could be due to recent scandals that have raised attention on corporate accountability, or maybe the fact that poor board governance can lead to disaster.
One of the most critical guidelines for effective governance is that boards must always be impartial when making decisions. This means that they should not consider any external interest that might influence their judgment regardless of personal beliefs or relationships with fellow directors. They should also stay clear of favoritism and only give positions to friends and family in the event that they are the ideal fit for the organization.
Another important tip is that a well-organized agenda is crucial for the effectiveness of any board meeting. It should be clearly organized into categories of items that require information and items for action and strategic discussions. This will streamline the process of deliberations on the board and reduce the amount of time spent on non-controversial issues. Similar to committee suggestions smaller, non-controversial actions items should also be put together into a consent schedule so that they can be approved by the simple majority vote.