The role of the board is to provide direction and oversee the executive management team. It makes sure that company policies are implemented and that all fiduciary obligations are fulfilled. While some boards entrust too much authority to their executive leadership however, the majority do not take their responsibilities to the fullest extent. The media is full of stories about business failures caused by corrupt or incompetent management teams.
To avoid these disasters To avoid such catastrophes, it is important to ensure that your board has an array of perspectives and capabilities. It must also function effectively as a team. This requires setting up guidelines for managing your board such as embracing diverse perspectives and taking on leadership roles, encouraging an agile structure (e.g. forming committees for new risks) and involving in continuous evaluation of the board as well as individual members.
Another board management principle is to not get too involved in the day-today operations of your business. The primary role of a board is to determine the long-term goals of your company and its place within society.
It may seem like an obvious idea however, many businesses struggle to implement this idea. For example, some board members start having meetings directly with management without the CEO’s knowledge or take a leap of faith in the hope of being helpful. This can put the CEO in a difficult spot. The CEO should work with the board chairman and other directors in order to resolve the issue and restore trust.