Board at work
Responsibilities which board of directors has to play:
- • determining the company’s strategic vision, goals and policies.
- • monitoring progress towards achieving the goals.
- • appointing senior management.
- • accounting for the company’s activities to relevant parties, e.g. shareholders.
the challenge of rapid change may affect even the best led boards. The directors periodically consider what crisis eventualities might be taken into account in relation to various third parties. They should work with future in mind.
Board meetings:
A board conducts its meetings according to the rules and procedures contained in its governing documents. These procedures may allow the board to conduct its business by conference call or other electronic means. They may also specify how a quorum is to be determined.
In the board meeting, put good and bad news on the table. Have critical discussions on key business issues. Listen and learn from the board discussions. The board will keep up-to-date on the company from an external view point. The board ask all its questions and state all its concerns as they arise.
Engage board members in to the organizational matters. Ensure that board meetings allow enough time for the exchange of ideas. Information the board receives for board meetings should be useful, adequate, in an efficient format, shows external environment. Presentations to the board should be focused on the right issues, clear and helpful.
The board should use it’s time for strategic planning. Every board need a sense of purpose, a vision and a set of priorities and objectives. The board should properly address all the major strategic issues that will affect the organization’s viability, reputation and continuing prosperity. Directors talk about real issues in the boardroom.
Dialogue between the board members are sufficiently broad, insight generating and open. they listen and consider each others comments. But they take reasoned and independant positions. The atmosphere in the boardroom encourage critical thinking.
An effective board member always come to board meetings and committee meetings fully prepared. They understand company’s philosophy and strategies. He enhances group discussions by pushing the discussions forward, integrates various viewpoints, help discussions reach closure, encourage openness, bring new thinking, help the group to confront reality. A good board member is a team player, listens to and considers others’ viewpoints. He take in to account the viewpoints of all stakeholders. He is willing to change his or her viewpoints. He exercises independent judgements. He understand and focus on issues that are key to the business. He open his doors to his or her network to help the CEO and the company. Finally, he clearly differentiate between managing and governing a corporation. Board members share their knowledge and experience to help CEO and the company.
All directors must contribute to the board’s affairs on a broad spectrum of matters, rather than seeing things from a specialist’s viewpoints. They must have the breadth of vision and thinking necessary to help the board address the policy and strategic issues, as well as all the operational matters.
Financial awareness and numeracy are required of all directors. In the case of quoted companies, knowledge of how the stock market works. A knowledge of sources and methods of funding must also be acquired by the director.
Directors must exercise their powers for a proper purpose. While in many instances an improper purpose is readily evident, such as a director looking to feather his or her own nest. Sometimes they try to divert an investment opportunity to a relative. These are breaches of the director’s duty to act in good faith.
Board room wall pictures:
Wall pictures in BOD Room have magical effects in the future trajectory of the company. You are what hung on your wall. Hang pictures of goals and ambitions on your wall. If you hang wall pictures representing things or ideas that you want to achieve, you will achieve it early. Your mind works on it twenty-four hours. Every major project in which the organization is focusing should be represented by a picture or a model. This picture should be hanged over the walls of its BOD room. This pictures on the walls will stimulate the intellectual functioning of the Board of Directors and leads to early achievements of the Goals. After achieving each goal, the picture can be removed and stored in an achievement archive shelf. A new picture will take the place for the next adventure of the groups mental efforts of the Board Of Directors. With a picture on the wall, everybody will stimulate to carry out necessary work and support decisions for achieving this objective. Everybody started thinking about getting fund for realizing the project. Everybody will start thinking about required support for realising it.
Effective committees are used to support the board. They confront real issues. They take collective judgements about important matters. At any instant limit number of committees to three. Constitute committees as and when required. Committees submit its report to BOD. The final decision should be taken by the BOD, not by the committees.
Board effectiveness is indicated by the quality of the dialogue in committees and in the boardroom. Discussions among directors should be on real issues and value adding conversations in sufficient depth and breadth.
The board always seek to improve its own performance and keep its composition evergreen. Board self evaluation identify areas to improve. A board always evaluate the improvements in company’s health compare with last years, competitions and external environment. It ensure that the company will be able to capture potential opportunities. Board creates right balance between short-term and long term goals. It ensures that the company has right CEO. It always have a full year agenda.
Relationships with Stakeholders
The duties of the board are owed to the company. The wellbeing of the organization must be the first responsibility of its directors. The directors are accountable and responsible to the company. However, in considering the interests of the company, the directors are jointly and severally accountable to the shareholders as a whole for its stewardship and for meeting their appropriate interests. The board also has responsibilities to meet the appropriate interests of the company’s stakeholders; such as employees, customers, suppliers, government, unions, stock exchanges, politics and the general public. Such appropriate interest will be treated in an honest and fair manner at all times but not to meet their every demand or whim. The board will see the cases of appropriate interest of the stakeholders and lay down policies for general guidance.
A board should communicate to its stakeholders properly. That can’t be delegated to outside agency. A specific director is personally responsible for public relation with proper, regular reporting procedures to the whole board. Even though one director is in charge of communication, every member of the board share the responsibility of effectiveness of company communication and public relation. Communication to stakeholders should be a regular and routine board item and the public strategy might be reviewed once or twice a year. In these reviewing process, the board should ensure that:
- the communications policy is sound,
- all who have right to know are properly informed,
- effective feedback system exist,
- early warning of problems are properly considered,
- a public relation strategy is in place,
