Corporate boards are comprised of individuals with expertise in business, finance, and industry. It is imperative that board members maintain objectivity to effectively assess performance and make decisions that serve the company’s best interests.
The CEO is accountable to the board, which carries the responsibility of overseeing the company and establishing long-term strategic objectives. To ensure the alignment with company interests, a general rule is that board members should exhibit independence and not have conflicting interests. Nevertheless, it is not uncommon for company directors to hold board positions. Additionally, in small corporations, it is possible for a single individual to assume multiple roles such as president, secretary, and treasurer.
Not every individual is suited for a board position. Candidates lacking objectivity or those motivated by politics and personal gain should be excluded. Harmonious interaction with other board members is a prerequisite for effective governance. Members must also recognize their legal duties as corporate fiduciaries, entrusted with the interest of the shareholders, as defined by state statutes and judicial precedents.
Board members are expected to actively participate in meetings, despite their potential length, and contribute meaningfully to the discussions.