Governance of boards is a crucial area of business and often it can be difficult to form a team that can make decisions in the best interest of the business. The best board governance tips can help you form an effective board that is comprised of a wide range of skills and experience, that works together for decision-making and reflect the diversity of your company.
One of the most important suggestions for board governance is to ensure that the board is aware of its role, how it works with management, and the connection between the two. This helps to minimize conflict and friction while ensuring that the board is effective and able to achieve its goals.
Another tip is to establish an in-line process for evaluating board members. This should include an initial assessment and periodic assessments as well as a way to address any concerns regarding performance. This will ensure that the proper people are in the appropriate roles and that all issues have been addressed.
The best boards also recognize that it is crucial to have a balance of new members who have new ideas, as well as experienced directors with experience in certain areas. They achieve this by keeping a regular schedule for renewal of the board and rotation.
A good board will also have a plan in place for selecting the new CEO. This is a critical task that can either ruin or make an organization. The most effective boards approach this by maintaining open communication with the CEO’s current team creating internal candidates and identifying potential external candidates.