The primary role of boards is consist of establishing policies, make strategic and significant decisions, and supervise the activities of the organization. A well-written policy can help a board to focus its efforts, avoid repetition of efforts, and preserve the necessary (but often thin) line between oversight and management activity.
Effective boards http://www.toboardroom.com/what-is-the-contract-management-process must be capable of identifying and addressing any new mission-critical issues. To do this, boards need access to as much accurate and complete information as possible. This could include detailed reports on expenditures and budgets, financial statements as well as annual and quarterly performance results as well as narrative reports on internal operations and programs and much more. It is important that a board is aware of and can effectively communicate the narrative told by these numbers.
Board members should be able discuss controversial and difficult issues, even if this causes tension within the group. It’s important for directors to have the freedom to challenge one another and play a variety of roles on the board – the ruthless cost cutter, the damn-the-details big picture guy, or the split-the-differences peacemaker. Directors can gain a better understanding of the possibilities available to them by playing different roles.
Research suggests that while it is widely believed that good board members are those who possess a high level of personal involvement in their company however this isn’t the situation. For example, the boards of failed companies as well as those of highly admired corporations had roughly the same number of outsiders. The key is the process of determining and communicating a firm’s strategy and potential risks, as well as the quality of communication.