The Board of directors is a crucial element for any organisation. They are a key and necessary part of managing an organisation efficiently and ensuring the needs of both the organisation and its stakeholders are met.
What is A Board of Directors?
A Board of directors is a supervisory Board; a group formed to oversee the management of an organisation.
They convene on a regular basis to discuss and make decisions about the organisation, often focusing on the bigger picture and less on the day to day aspects.
This group safeguards the interests of all stakeholders and ensures the company is operated in an efficient manner.
What Are The Roles and Responsibilities of A Board of Directors?
The roles and responsibilities of a Board of directors varies greatly, depending on the nature of the organisation and how it is run. The significant actions performed by the Board of directors may include:
- Governing the organisation; establishing a range of policies and strategic objectives
- Appointing and reviewing the performance of the chief executive
- Managing and monitoring financial resources
- Approving annual budgets
- Protecting the organisation's assets and shareholder’s interests
- Reporting the organisation's performance to the stakeholders
- Hiring and overseeing the senior management
- Holding the annual shareholders’ meeting
The Board of directors’ foremost responsibility is towards the organisation’s shareholders. The Board ensures that the organisation doesn’t risk the shareholders’ and investors’ assets with any of its actions.
The Board of Directors creates the groundwork for an organisation by establishing its objectives, goals, and purpose. The Board ensures that the executive team is adhering to the organisation's objectives and strategies.
Executives are accountable to the Board and must make decisions that are in the best interests of the company and it's stakeholders.
How Is A Board Of Directors Set Up?
The shareholders vote for the Board of directors at the organisation’s annual shareholders’ meeting, and the nominees are elected by a specific nomination committee.
The structure of a Board is determined by an organisation's articles of incorporation and its corporate bylaws. Bylaws can set the number of Board Members, how the Board is elected, and how often the Board meets.
While there is no set number of members for a corporate board, many organisations find that in order to ensure cohesion as well as include a diverse range of members, 8 to 12 directors is preferred.
The Structure Of A Board Of Directors
A company’s Board of directors typically includes one company insider, such as the chief executive officer, alongside directors that are outside, independent or not otherwise affiliated with the organisation.
Directors are often outside members with relevant expertise, because the majority of independent directors face fewer conflicts of interest in their obligations to the Board than inside directors.
Board of director members can all hold different positions within the committee, and these include:
- Chairman: A chairman leads the Board, heading the committee and Board meetings.
- Managing Director: A managing director is elected by the organisation’s executive directors to manage, guide, and monitor company performance.
- Executive Director: An executive director is a company employee and a part of the Board, representing the organisation as an individual that actively participates within it.
- Non-Executive Director: A non-executive director is a part of the Board but doesn’t belong to the organisation, and they represent an objective, outside perspective while giving a voice to stakeholders.
- Other designations such as Vice Presidents, CFOs, treasurers, audit officers.
For nonprofits and private companies, Boards of directors can be structured differently as there are fewer regulations to follow.
Private companies can appoint Board members from the organisation’s executives and any other significant management figures, as well as the owner themselves.
For nonprofits, a trustee board is quite common, and does the job of managing and being responsible for the organisation.
Why Is A Board Of Directors Important?
A Board of directors is a vital part of your organisation, as they manage and oversee important aspects of a company and provide a supervisory body that helps your organisation achieve its objectives and goals.
They ensure the organisation is run efficiently and represent a responsibility towards the stakeholders and shareholders, while also holding the chief executive accountable in the actions of the organisation.
They are a committee that the organisation can turn to in times of crisis, as well as rely on in times of growth and success.
However, in order for your Board of directors to operate efficiently, your Board meetings also have to run smoothly. In this digital age, online and remote Board meetings are becoming much more commonplace, and you need software that ensures the quality of online meetings.
This is where Convene comes in.
How Convene Can Help Your Board Of Directors
Convene now comes fully integrated with Microsoft Teams, ensuring that your meeting process is even more seamless.
Our Board portal features include:
- A Document Library, with role-based access to ensure your sensitive documents are protected.
- A built-in Audit Trail, so you can be sure you are compliant with all regulations.
- Integrated Video Conferencing, so you can make the switch from remote to hybrid working seamlessly, whilst still viewing your Board Pack all on one screen.
- Surveys, with the option for anonymity, so you can be sure you are aware of your employees' opinions.
- Action Items, so you can follow up on any tasks automatically.
- Accessibility Features, including text-to-voice, which makes us the leading accessible Board Portal.
- Fully GDPR-compliant security, including AES 256-bit encryption and ISO 27001 accreditation.