Three Core Obligations of a Board of Directors and Stakeholders

A board of directors oversees and advises an organisation, is completely independent of the management and makes decisions to ensure that the business is successful. It ensures that the business is operating legally and in the best interests of employees, investors, and other stakeholders. Board members should possess a broad range of knowledge and experience, and strive to establish a culture of trust and transparency.

The size, composition and structure of a board will differ depending on the nature of the entity. This includes boardroomnyc.com/role-of-the-board-in-strategic-planning/ whether it is publicly traded (as a public company) or privately owned (private or limited) or owned by family members or employees (family-owned). The rules that govern each board’s governance are outlined in the articles of incorporation or other bylaws.

The primary responsibility of the board is to fulfill three fundamental obligations:

A well-rounded board includes members with a variety of experiences and backgrounds. They are generalists, able to keep a broader perspective, and yet are experts in their specific areas of expertise. They are not afraid to ask tough questions and challenge management’s assumptions. The best boards encourage diversity and encourage collaboration, communication and trust.