Board Management Principles

The job of a board is to provide direction and oversight to the executive management team, and to ensure that company policies are adhered to and that all fiduciary obligations are fulfilled. While some boards entrust too much authority to their executive leaders but most boards don’t take their responsibilities to the fullest extent. The media is brimming with stories about business catastrophes caused by incompetent or corrupt management teams.

One of the best ways to avoid issues is to make sure that your board has a full range of skills and perspectives and is able to work well as a whole. This requires establishing specific management guidelines for your board including accepting diversity when creating your board and taking on leadership roles, fostering agile structure (e.g., forming committees to deal with new dangers) and engaging in ongoing evaluation of the board as a whole and individuals.

Another principle of board management is to not get too involved in the day-to-day activities of your business. The main role of a board is to establish the long-term vision of your business and its place in society.

Although it may seem like a straightforward idea, many businesses struggle with this concept. For instance there are board members who start having meetings directly with management without the CEO’s knowledge, or jump to conclusions in an effort to be helpful. This could put the CEO in a precarious position. The ideal situation is for the CEO to work with the board chair and other directors in resolving this issue and establish trust once more.

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