Board directors are accountable for the direction, strategy, and performance of an organisation. They also have to represent the interests of shareholders and ensure that management delivers value. To accomplish this, boards must determine what duties fall within their scope and which are able to be delegated to management.
They also make a decision on important strategic issues such as mergers and acquisitions, stock splits, share program repurchases, and declaring dividends. They are also responsible for the hiring and firing of CEOs and setting the compensation for senior executives. To do this, they must be able to ask tough questions and engage in debate. In addition, they are accountable for ensuring that the company’s finances are in order and compliance with laws and ethical standards.
A competent board member is able to comprehend complex issues and providing insights that improve the effectiveness of the board. They can also build an environment that encourages collaboration and interaction in the boardroom. They are knowledgeable of the field they work in, and have a depth of expertise that allows them to offer an unbiased opinion.
As the world around us becomes more complex, so do our corporate responsibility. The COVID-19 pandemic has taught us that we must increase our speed and agility in order to keep up. As a result the majority of boards have expanded their scope of duties and are now focusing on topics such as the development of talent and culture sustainability, sustainability, risk and resilience management, and digitization and technology. To accomplish this board members must be digitally proficient and prepared for the increased level of engagement required to develop forward-thinking agendas.