What Is a Board of Directors?

If you ask the group of people what a chair is the most common answer will be “Something that you sit on.” However it doesn’t give the full meaning of the chair as an inanimate object made for humans to sit on. Chairs are part of a set of categories or sets called “furniture” that includes other items with the same shape, function, or form. Chairs are available in different shapes, sizes and designs to meet the needs of people of all ages.

Board of directors are an governing body that is elected by shareholders of a company to set corporate management and oversight policies. The structure of a board may differ and the bylaws of the company will determine how many members are on the board, as well as how often they meet and election procedures. A board is typically comprised consisting of insiders from the company who are well-versed in the internal workings of an organization and qualified individuals from outside who are knowledgeable in a related area.

The board is a strategic entity which oversees the CEO’s pursuit of goals accordance with the overall vision of the company. In times of crisis, when the CEO isn’t everywhere the board acts as a shield and assist the company in navigating unfamiliar waters. The ideal board requires an attentive eye to identify individuals with the appropriate skills and experience who are invested in the organization’s mission. The keeping of a database of prospective candidates is a good way to find the perfect suitable candidate for a job.

due diligence process