The "very private club" of the board of directors...Really?

The board of directors, the cornerstone of the company, is very often perceived as mysterious and intrigues those who aren’t involved in this world.

The board of directors, the cornerstone of the company, is very often perceived as mysterious and intrigues those who aren’t involved in this world.

While everyone agrees on the need for a board, there are different views on the role it plays in the life of the company.

For company employees, the board is perceived as a closed and very selective club of highly placed people with a great deal of experience in the various areas of company management. Their experience means that they have been involved in the most varied situations that a company may face over time.

The saying: 'the orders come from above' illustrates this perception perfectly.

But what does the board consist of? And what do its members contribute to the company?

Being a member of the board of directors is above all a personal commitment. Except in the case of an investment fund, which is represented by a representative, board members make a personal commitment to the board. There is therefore a notion of responsibility for the role they accept.

The board member will support the management of the company with his or her expertise and experience in one or more areas needed by the company. They support the company in the strategic aspect and in the long-term vision. This support can be linked to a temporary phase in which the company finds itself (growth period, crisis, etc.), but can also be part of the core business (tech, finance, etc.) or specific regulations and legislation (ESG, decarbonization, etc.).

Board of directors meetings conduct

The board of directors is punctuated by board meetings. During these meetings, the CEO and CFO, who represent the company's executive side, report on the company's situation. Figures play a very important role. They allow the pulse of the company to be shared with the board. Major projects and plans are discussed. Based on this presentation, which is often a huge amount of highly condensed information, the board members must be able to define the necessary actions to be taken to maintain the company's strategy and vision.

The session is a collective exchange during which the various participants will enrich the debate with their own expertise. Some of the resulting decisions will have to be voted on to be validated.

It is then up to the CEO to apply the decisions taken and the advice obtained in the executive, i.e. in the different operational layers of the company.

The importance of the link between strategy and execution

It is often difficult for the workers in a company, who are involved in the day-to-day operational tasks, to follow the strategic vision decided at the highest levels.

Therefore, it is crucial that the CEO is a strong link between the strategic committee and the executive committee. He is the one that must bridge the theory and its application by pleading the common interest of the decisions that must be implemented.

Diversity at the board level

As time goes by and mentalities evolve, this very closed and selective club is gradually changing. Of course, it will always be made up of people who can provide useful advice to the company, but the somewhat dusty image is tending to evolve. There are more and more women, appreciated for their crisis management skills, their creativity, or their diplomacy in communication. Diversity of talents, whether generational or cultural, contributes positively to the opening of this small world of boards.

The benefits of a diverse board are numerous. Firstly, diversity brings new perspectives and ways of thinking, which can challenge the status quo and foster innovation. Secondly, it promotes inclusivity and can help create a more welcoming and respectful work environment. Lastly, a diverse board can help the company better reflect the diversity of its customers and stakeholders, which can lead to better decision-making.

In conclusion, the board of directors is a crucial component of any company. Its members bring valuable expertise and experience to the table, and their decisions and advice can have a significant impact on the direction of the company. While the board may have been perceived as an exclusive club in the past, it is evolving to become more diverse and inclusive, which is positive for the company and its stakeholders.

Learn more about board governance: GOVRN

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