The board of directors is responsible for the day-to-day operations as well as long-term strategies of a business or non-profit institution. It is the board that has a fiduciary responsibility to shareholders and other stakeholders.

The board decides on and supervises the chief executive officer as well as other management personnel. It also decides and approves major shifts in the direction of a business. The board also offers advice to the CEO and the other executives about strategic goals and capital allocation. It also gives guidance on risks and legal issues because it is legally accountable for the most crucial business decisions.

It is essential that board members adhere to the principles for collaboration and communication. These principles help build trust and ensure quality decision making. Board members should have previous experience in governance and leadership. In addition, it is beneficial for boards to have diverse gender or race, age and geographical diversity so that they reflect the company’s customers.

In addition, board members should be capable of committing an extensive amount of time. In the last few decades directors of boards have been reported to spend more time performing their duties. It is therefore important to ensure that candidates are evaluated by the organization when selecting board members. This can include a formal orientation that helps new directors get a clear picture of the mission, overview and the background of the company in which they will be serving on the board.

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