Board Management Principles
Boards are unique leadership structures that have substantial power. They are accountable to people who are both inside and outside the organization. However, they are an incredibly flexible structure that is only limited by basic state-by-state guidelines as well as the collective power of a board to change its composition and structure.
While boards are entrusted with a variety of responsibilities but they should concentrate on the oversight of management policies and decisions while leaving operational matters to the executive team and the CEO. This means establishing a governance system and developing guidelines for their actions as well as those of managers. It also means focus on regulatory and legal issues including compensation, conflicts of interests as well as community benefit and CEO evaluation.
A good governance system is essential for the operation of a board. It should contain clear documentation on the roles and responsibilities for each committee member and director. It must also be readily accessible to all directors through an online portal for board members. This allows directors to efficiently prepare for meetings, and lets board discussions stay focused on the core issues of the meeting. It also improves communication between members as well as an easier transition when board member rotations occur.
A good governance framework includes the appointment of a lead director or presiding director, an independent board member who is responsible for the effective conducting of meetings and also sets the agenda. It must also include scheduling executive meetings according to the requirements of stock exchanges and the time that directors have individually to meet with the CEO even if management is not present.
