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Board Governance Facts

Board Governance Facts

www.toboardroom.com/how-to-write-board-meeting-minutes/

The primary role of boards is that are to formulate policies and make strategic and important decisions, and supervise the organization’s activities. Written policies can help a board to focus its efforts, avoid duplication of effort and maintain the essential (but often thin) line between oversight and management activity.

Effective boards should be able to identify and addressing evolving mission-critical concerns. This requires access to the most comprehensive and accurate information possible. That information can include detailed reports on expenditures and budgets, financial statements along with annual and quarterly performance results, narrative reports on internal operations and programs and more. It is vital that a board understands and can communicate the story that these numbers tell.

Board members need to be capable of discussing controversial and difficult issues, even if it creates tension within the group. It’s important for directors to have the freedom to challenge one another and play a variety of roles on the board – the ruthless cost cutter, the damn-the-details big picture guy, or the split-the-differences peacemaker. Directors can gain a better understanding of the possibilities at their disposal by playing different roles.

Research suggests that although it is widely believed that the best board members have a high level of personal commitment to their business but this isn’t the reality. The boards of successful and highly admired corporations, for example have roughly the same percentage of outsiders. The key appears to lie in the process of understanding and communicating the company’s strategies and risks and the quality of discussions and dialogue.

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