How to Build a Diverse Board of Directors

A board of directors is an advisory committee that helps a corporation perform as efficiently as it can. They are independent of the management of the company, and concentrate on making high-level decisions that affect shareholders and stakeholders. They also protect the company during times of crises. The structure of the board varies according to the company’s rules of incorporation, articles of incorporation and bylaws. It is typically composed of non-management employees that are elected for a specific time. Some companies prefer to have their term end and begin at different times in order to avoid having too many vacancies at a time.

It’s important to select members of boards with a variety of abilities and backgrounds. The most effective boards are diverse and comprise people from diverse genders, ethnicities, backgrounds and experiences. This gives more perspectives to the table which can aid in identifying new opportunities as well as overcome challenges.

When you’re forming your board, make sure you look for candidates with specific experience that can aid in driving the growth of your business. A board member with experience in capital raising can aid your business in scaling up and profit from market opportunities. A person with a background in marketing on the other hand will provide insight into how to promote your brand and increase sales. This is the same for those who have an extensive knowledge of the law or financial expertise, which can help guide your company in challenging circumstances. A well-run board of directors has many responsibilities, which includes their role as legal fiduciaries. They also determine the direction of the company’s strategic plan and oversee to ensure that the general managers and the CEO are following the plan.