What Does a Board Director Do?

A board director is a person who oversees the governance of a company or non-profit. They are legal representatives of owners (shareholders/stockholders) and are legally responsible for high-level decisions. They also set the policies and decide if they will pay dividends, and decide the amount of compensation top management receives.

A good board member must be knowledgeable in their area of expertise, and also able to rapidly learn about new industries. But more importantly, they should also be able to comprehend and apply abstract concepts such as strategy and innovation. They should be competent enough to challenge the status quo, pose tough questions, and build trust between the team. In the past, boards were focused primarily on oversight of management, but they are now involved in discussions about strategic initiatives such as resilience and risk management, sustainability, technology and digitization, potential mergers and acquisitions, and cultural and talent board management development.

A well-rounded board should ideally be composed of directors from both sides. Inside directors are employees or substantial shareholders of the company and are a crucial source of knowledge and insight. The outside directors bring experience and relationships which are beneficial to the company.

A strong board is a team composed of individuals who care for one another and are united by common goals and values. This helps to create a positive boardroom environment and ensures that meetings are constructive.