A board of directors can offer a variety of benefits to both individuals and organizations. It’s an excellent way to gain experience in making and directing decisions, establish a network and make connections with philanthropists or community leaders and can help advance your career.
Whether they are for-profit companies or not-for-profit organizations, all boards have to be guided by rules and rules that govern their operations. It is essential that those who are contemplating joining a board understand the rules and regulations, as well as what their obligations are.
Board members must be involved and active, attend regularly scheduled meetings and read documents like financial statements and strategic plans. They should also know how to ask good questions. They must understand the short-term and long-term objectives of the company and the resources it has and be aware of any conflicts of interests.
In the case of a publicly traded company, board members must also be prepared to take on the lead and react rapidly to situations of crisis to fulfill their fiduciary obligations and maintain a good governance standard. It is also a board’s responsibility to maintain relationships with the community it serves, and be attentive to their requirements and expectations, and be involved in community outreach activities.
Not-for-profit boards must consider all of their stakeholders, which typically include the people they serve, businesses that support them as well as elected officials, government agencies that regulate them, as well as donors who contribute financially to their organization. They are also accountable for putting systems in place to protect themselves from embezzlement and fraud and for developing relationships with other community groups.