The need for a strong, well-functioning board of directors has never been greater. The board’s role has become more wide-ranging, complex, urgent, and time-consuming, involving leadership and structure, composition and qualifications, availability for service, and compensation.
Business strategy, financial stewardship, risk management, diversity, management performance, compensation, and succession all remain high on a board’s agenda.
However, newer issues assume comparable importance. Boards now must address fast-moving developments such as rapid technological change, innovative business models, and business disruption.
Sustainability and cyber security are now routinely discussed at the board level.
Scrutiny by government regulators and activist investors increase in intensity.
The challenges, opportunities and strategic requirements of each company are the prime determinants of board member qualifications. Board candidates must have demonstrated integrity, high ethical standards, and an understanding of fiduciary duty. They need listening, communicating, and influencing skills, as well as expertise relevant to the corporation’s business purpose, financial responsibilities, and risk profile. In today’s environment, boards should have the capacity to evaluate their composition, processes, availability of timely and relevant information, culture and climate, and learning for continuous improvement.