Boards are unique leadership structures that have considerable power and responsibilities to those outside the organization as well as those within it. However, they operate within the framework of a flexible structure, which is limited only by guidelines set by states and the collective will of a group to change its own composition and structures.
Boards have many duties but should concentrate on the oversight and management decisions. They should leave operational issues to executives and CEOs. That means establishing the framework for governance and creating policies that guide their actions and those of their managers. It also means paying attention to legal issues including compensation, conflicts of interests, community benefits and CEO evaluation.
A solid governance system will be essential to the activities of the board. It should include an explicit description of the roles and responsibilities for each director and committee. It should also be easily accessible and available to all directors through an online portal for the board. This lets directors organize meetings efficiently and keep discussions on the board focused on the main concerns of the meeting. It also allows for better communication between members and an easier transition when board members rotate.
A good governance system also includes the appointment of a lead or presidency director, a non-independent board member who is responsible for the effective running of a meeting, and also sets the agenda. It should also include scheduling executive sessions according to the requirements of stock exchanges, and time for board management principles directors individually to meet with the CEO when management is not present.