Governance of the board is an essential aspect of business and it can be a struggle to form a cohesive group that makes decisions that are in the best interest of the business. The most effective tips for board governance can help you form a board that has diverse skills and experiences, works well as a group for decision-making and reflect the diversity of your business.
One of the most important tips for governing boards is to ensure that the board is aware of its purpose, how it works with management and how it interacts between the two. This helps to reduce conflict and friction while ensuring that the board is efficient and able to achieve its strategic goals.
Another tip is to employ a consistent evaluation process for board members. This should include an initial evaluation along with regular evaluations, and a mechanism for addressing any performance concerns. This will ensure that the right people are in the appropriate roles and that all issues have been addressed.
The best boards also understand how crucial it is to have a mix of new members who have fresh ideas, and experienced directors with experience in particular areas. This is why they make sure to have a regular schedule of board renewal and rotation.
A well-run board will have a plan to select the next CEO. This is a critical task that can make or break a company. The best boards plan for this by establishing open communication with the CEO who is currently in charge as well as developing internal candidates and spotting potential candidates from outside.