The structure of the Board of Directors or Board of Trustees is among the most important factors that determine the future of a company or organization’s success. A well-organized Board will guarantee that each member understands their role and how to fulfill it. It also assists the organization or company to attain its goals.
The board is principally accountable for overseeing the executive board and setting the overall direction of the company. The board is also responsible for the hiring and firing of a CEO, determining CEO pay, determining compensation for other executives in the company, and making crucial strategic decisions.
External or independent directors are non-executive members of a board who do not hold executive positions in the company and are paid fees for their participation. They provide different perspectives to the board, and are often subject-area specialists within the field the company is operating in.
A two-tiered Board is comprised of a board of management comprised of executives from the company, as well as a supervisory council comprised of directors who are independent. The supervisory board is accountable for making sure that the management board’s activities are conducted in accordance with corporate laws and policies.
A consultative or advisory board is composed of people who are part of the business. These include investors or customers. They can provide insights to the top executives of a business and offer diverse perspectives that might not be offered within the company itself. They can also help find potential growth opportunities and assist with the implementation strategies to achieve the goals of a company.
