It is not for everyone to assume the position of a board chairman however, it is an excellent opportunity to gain knowledge about best practices in governance and to be exposed to a wider network. The experience is especially beneficial for someone who is younger and wants to advance their career, as it allows them to learn how to make decisions in an organization, instead of on their own. It also helps them develop a stronger understanding of the importance of effective reporting, which makes them more effective future senior managers.
A board is composed of a number of people who each have their own specialization. Each position has its own responsibilities but they all share three fundamental legal obligations.
Protecting the interests of shareholders-A board is accountable for ensuring that the company operates in a manner that maximizes the value of its shares. It is also important that shareholders are informed promptly about any financial or security risks that could affect their investments.
Establishing policies that provide oversight of finances. Boards are responsible for establishing policies that assist an organization to track its expenses, assess how closely its spending matches its budget, and keep track of any loss, theft or confusion.
A board should home conduct an annual self-assessment of its members to determine whether its members are functioning effectively. This can include assessing a board’s ability to manage risks, set priorities and recruit members to fill in gaps in its knowledge.
Facilitating meetings-A board must make sure its members can attend regular meetings and engage in productive discussions. This means using an excellent software for managing boards to facilitate communication between board members and to ensure efficient meetings.
