A board of directors is a group of shareholders who elect members to represent the interests of a company. The board comprises the chief executive officer (CEO) as well as senior managers and eminent individuals who aren’t involved in day-today operations. It oversees management and sets high-level strategies. It meets regularly to review and monitor performance. It also approves major corporate transactions, including mergers, purchases, stock splits and new product launches. The board also sets the compensation policies for CEOs and other executives, making sure they are aligned with organizational goals. It also manages risks, and oversees operations and financial performance which includes the preparation of annual budgets and financial reports.

A great board requires a variety of perspectives and expertise. The best boards are active and proactive, dealing with issues that could impact their businesses, such as strategic focus and culture, succession of leadership the management of talent, governance as well as resilience and risk digital transformation, sustainability and possible mergers and acquisitions. They provide guidance and oversight on these issues, while also ensuring the crucial line between their role as a board and that of management.

To fulfill their roles and responsibilities, the most efficient board members work closely with the CEO, allowing them to better understand the company’s mission and strategy as well as the challenges and risks. They are able to participate in a thoughtful discussion that focuses on strategic planning and oversight, as well as accountability. They also make decisions in the best interests of the company’s interests while maintaining autonomy and avoiding conflicts of interest.

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