The operation of corporate boards is shrouded in mystery. The main function of a board is to oversee the executives who run the business on a daily basis and ensure that the business operates in accordance with the rules established by its shareholders. This might include hiring or firing the CEO, establishing executive compensation, scrutinizing financial reports, and evaluating the company’s business practices.
In addition to overseeing management, many boards are also charged with encouraging the long-term interests of shareholders in the company by providing input and constructive challenge on issues like corporate strategy as well as resilience and risk management, culture and talent development possible mergers and acquisitions, and sustainability. These issues are becoming increasingly important as investors shift their attention on non-financial indicators like ESG (environmental social and governance).
As a result, it is essential that each board member understands the roles and responsibilities of their fellow board members, so there is no confusion at meetings. To do this, the board needs to have a clear structure which sets the tone for discussions of these types of topics.
Being a member of a board of directors can be a rewarding milestone in your career and offer you unbeatable learning and networking opportunities. Lynch says that getting a seat on a board takes a lot more patience and perseverance as they don’t show up every day. So, before you put your time in, ensure that you are prepared and have a list of contacts for introductions. It is helpful if you are acknowledged as an expert in your field and are able to prove how your knowledge will benefit the business if you were to take on the role of a board member.