A board of directors is an organization which oversees and safeguards the long-term interests of its shareholders. A strong board, composed of people with diverse skills and experience is crucial to any business.
Traditionally, boards have endorsed and approved strategies proposed by managers while overseeing their management teams. However, today a well-designed and well-planned board of directors can provide proactive leadership on major issues, such as corporate strategy and vision managing risk and opportunities and innovation, as well as talent sustainability, and succession of leadership.
A company's board is typically comprised of both outside and inside members. An inside director is a company executive, while an outside director isn't employed by the company. To be considered an independent director one must not have connection to the company in any way.
When assembling your board seek out individuals who are committed and experienced in your industry. It's also important to include people with diverse skills, who can bring creative problem-solving and creativity along with strategic thinking. You should also search for people with niche expertise like finance, marketing or capital raising.
It is important to know that you're legally accountable and are obligated to be a fiduciary as board members. If you are a shareholder, then you also have the ability to cast a vote for board members during the proxy voting time. If you're considering voting for the appointment of a new board member, make sure you read through their proxy materials and make sure they're truly independent.