The Importance of Board Directors and Stakeholders
The success of a business is contingent on the board of directors and the stakeholders. The board is a group of people that are responsible for overseeing the company and taking decisions that are in the best interests of shareholders as well as the company’s other stakeholders. The board is not a part of management and focuses on the company’s main issues, not day-to-day operations.
A well-functioning and effective board can dramatically increase the profitability and growth of a business. Board members are vital to provide insight and direction to the company’s leadership team to help steer strategy and ensure that the business is on the right track to meet its business goals. The board is accountable for ensuring that the business adheres to all applicable laws and commercial considerations.
In the beginning stages of a company the stakeholders, shareholders and directors are all the same. However, as the business grows the roles of each group will start to diverge.
Stakeholders are directly involved in the decisions that are taken by the board and the management team. These decisions may affect their salary as well as their job security and working conditions. Employees might be worried about the direction in which the company is headed, and also about its values, culture, and the purpose of the company.
Being a member of a board can give you the opportunity to build a network of talented and similar-minded professionals. This could lead to new career opportunities as well as enhance your personal life.
