Board Management Principles

The job of a board is to provide direction and oversight to the executive management team, ensuring that the company’s policies are in place and that all fiduciary duties are fulfilled. While some boards give too much power to their executive management, most do not go far enough. Unfortunately, the media is flooded with tales of business disasters that are the result of improper or unqualified management teams.

One of the most effective ways to avoid catastrophes is to ensure that your board has a broad range of expertise and perspectives and is able to work well as a unit. This requires you to establish certain board management principles including embracing diversity when building your board and assuming leadership roles, fostering agile structure (e.g. creating committees to address new dangers) and conducting a regular evaluation of both the board as well as individual members.

Another principle of board management is not to get too involved in the day-today activities of your business. This is because a large part of the job of a board is to determine the long-term vision for your company and how it is integrated within the wider society.

Although it may seem like a no-brainer, many companies struggle with this concept. For instance, some board members start meeting directly with management without consulting the CEO, or make quick judgments in an effort to be helpful. This can put the CEO in a difficult position. Ideally, the CEO can work with the board chair and other directors to work out a solution to this issue and build trust again.

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