Governance of the board is an essential aspect of business, and is often a challenge to form a cohesive group that makes decisions in the best interest of the company. The best practices for governance will help you establish an effective board that is comprised of diverse skills and experiences, works well together for decision-making and reflect the diversity of your company.
One of the most important guidelines for governing boards is to ensure that the board is aware of its function, how it interacts with management and how it interacts between the two. This helps to reduce conflict and friction while making sure that the board is efficient and capable of achieving its goals.
Another suggestion is to establish an in-line process for reviewing board members. This should include an initial assessment, regular assessments and the ability to address any concerns regarding performance. This will ensure that the proper individuals are in the right roles and that all issues have been addressed.
Great boards also realize the importance of having a balance between new members with fresh ideas and experienced directors who provide expertise in particular areas. They achieve this by keeping a regular schedule for renewal and rotation.
A good board will also have a plan in place for deciding who will be the next CEO. This is a crucial job that can determine the fate of a company. The most effective boards plan for this by maintaining an open dialogue with the CEO, identifying internal candidates, and spotting external candidates.
