Q&A: Can a Board Member Be an Employee?
The structure of a?board of directors?has evolved over the years. There was a time when most—if not all—corporate board members were company employees, as they had a vested interest in the company’s governance structure.?
Over time, opinions shifted and boards began to realize they can take action with greater clarity when none of the members are active employees.?
Even though a CEO and senior manager may attend?board meetings, they often don’t hold voting power. While it’s possible for an employee to be part of a board of directors, it occurs less frequently today compared to a few decades ago.
What is a Board Member?
A?board member?is a voting member of a company’s board of directors. The directors are a separate governing body that helps to guide a company toward profitable, ethical, and legally compliant success.?A board of directors typically consists of experienced business executives who are paid separately as consultants, not direct employees of the company.
Board members are essential because they provide specialized insight and big-picture planning. Their perspective isn’t clouded by the day-to-day concerns of employees, managers, and even executives within the company. This ensures they can make sound business decisions while avoiding conflicts of interest.
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Can a Board Member Also be an Employee?
There’s no law prohibiting an employee from becoming a board member, or an?executive board?member from becoming an employee.?
However, employees often experience a conflict of interest when acting as board members, notably because all employees, including the CEO, are directly affected by board decisions. These decisions frequently include matters of pay, benefits, and operational policies.
Concerns Regarding Employee Board Members
There are a few concerns to address when someone serves as both a?corporate board member and an employee of the same company.
Want to read more about board members also being employees? Read the article in its entirety: https://www.onboardmeetings.com/blog/can-board-member-be-employee/