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Skills and expertise Even though businesses are well equipped with the required skills and expertise that are essential to function effectively and continuously in an ever-changing business environment. Having a Board of directors (BOD) helps senior leaders of the business to focus on the growth strategies of the business. The board members consist of expertise from various fields that can bring along business contacts and networks, which is essential for smaller businesses. Corporate Governance Corporate governance structure of any organisation is a crucial factor for its success. It consists of a set of rules, principles and processes by which the company is directed and controlled. Corporate governance structure provides the company guidelines to help it attain the goals and success that it desires. Furthermore, it provides a framework that helps to balance the expectations and interest of all the stakeholders of the company. Independence and Accountability The BOD is expected to be an independently working party, which acts only in the interest of the company. They help in solving the conflicting matter in the company by taking firm decisions in the face of opposition. They are collectively or in rare cases, even individually accountable for the company’s performance, compliance and risk mitigation strategies. Strategic direction The senior management is always held accountable for the overall business strategy but it is strongly believed that the BOD has equal amount of responsibility in the matter. How much they can be involved in it might vary depending on the size of the business. Business owners should believe in active participation of the Board to take the lead role in crafting business strategies. This will help to ensure that the company and all the departments in it are aligned towards the crafted strategy goals. Alongside, they can even monitor the implementation of these strategies on a timely basis and make sure that they are executed accurately. Credibility and Legitimacy Having an effective BOD will convey the integrity and availability of balanced objective advice, which will help in mitigating the risks. This is viewed favourable by the financial institutions and investors, since it effectively lowers the cost of capital financing for the businesses. On the other hand, the customers and employees look at it as a safeguard of their interests, as it is theultimate protection of interests of various stakeholders of your company due to the existence of Boards. Furthermore, it has proven to be beneficial to the business owners and investors planning an exit strategy or the further growth of the business.
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