Board is the governing body of any organisation. It is legally responsible for all the actions of the company. It has full authority on financial operation and fires or hires any staff including Director of the company. Though it will not interfere in day to day activities or decisions but it make sure that mission maintained and strategy is followed. Not all boards are much powerful. Advisory Board can only guide company and do not have any role in finances or operations. An official Board of Directors is to be established mainly to attract outside investment to grow quickly. Talk to the Board Governance Consulting professionals here.
Firststep to develop a board is to figure outwhat kind of board we want. The type of board depends on the size of the company. A start-up does not need an official Board of directors until unless it is looking for external investment. Investors are always keen to invest in a traditionally structured company and like to communicate only through Board. Small companies opt for a less formal and legally not bound advisory board which could guide the company but will not interfere in any operational matters. Few companies have only Fundraising Boards which gets wealth to company only through their connections around the society.
Secondly to determine the size of Board once the type is fixed. The size can be determined by few factors like purpose of board for ex: the purpose is to build credibility among all communities; board will have more than 20 members as the representatives in board. If it is a working board 2 factors determine size like
- Fewer number (15 or less) to safeguard mission of the organisation and build strategies accordingly
- Large group (20 or more) if there are plenty of committees to share the work.
Once size is determined, by laws of the organization to be updated accordingly.
Third would be setting goals and expectations by Sacramento Board Development. While setting Expectations or goals for Board absolutely being straight forward leads to good results especially on Time and Financial matters. The board should always abide by the principles and mission of the organisation. Also there should be clear by law for whether board is responsible for compensation to employees or management failures. The limitations of board should be clear among the authorities of management committee and the board members too.
Fourth point is choosing right people for the board. It is crucial part of the process and is often most difficult part. Always need to focus on such people who could understand the finances and operations of the organization. Skills and talents of the Board members also need to be considered which bring expertise on the table. If the acquaintances are chosen for the board there would not be many differences between members. But outside influence is also required who is outside the company environment. There should be mechanism also to be defined for choosing Board members.
Fifth one is to define the process of strong communication would reap good benefits out of the board meetings.