Boards are unique leadership structures that hold significant power and responsibility to the people outside the organization as well as those within it. However, they are a flexible structure that is only limited by guidelines for each state and the collective decision of a board to change its own structure and composition.
While boards have a lot of responsibilities but they should concentrate on the oversight of management policies and decisions while leaving operational matters to the executive team and CEO. That means establishing an organizational structure for governance and developing guidelines to guide their decisions and those of managers. It also involves focus on regulatory and legal issues, compensation, conflicts of interests, community benefit, and CEO evaluation.
A solid governance structure is crucial to the activities of a board. It should contain clearly defined roles and responsibilities of each committee and director. All directors should be allowed to log on and use the board portal. This helps directors effectively prepare for meetings and keep discussions on the board focused on the main concerns of the meeting. It also allows for better communication between members and the smoother transition of board members rotate.
A good governance system includes the appointment of a lead or presiding director, an independent board member who is responsible for the efficient management of a meeting and also sets the agenda. It must also include scheduling executive sessions according to stock exchange requirements and the time that directors have individually to meet with the CEO when management is not present.