Hiview International Uncategorized The Importance of Board Composition

The Importance of Board Composition

In recent times, investors have centered on the importance of board directors. Boards are composed of individuals who bring their own special skills, knowledge and networks to the table. But the main goal of any effective board is to work as a team in order to monitor the performance and support the CEO.

To accomplish that goal it is essential that a board be structured to be efficient and well-equipped to serve its purpose. This is often accomplished by forming a group that can serve as a sounding board and uncover the truth.

It is generally recommended that boards have an equal number of new board members as experienced directors to ensure an equal amount of knowledge and perspectives. The most important factor in achieving this is to have an objective framework in place that permits nominating committees and the board in general to identify the skills as well as the qualities and talents that are required to make a perfect candidate for a director position.

A matrix of board members’ characteristics is a common tool that can be used to guide the selection process. But, it is important to remember that just because someone possesses certain traits does not necessarily mean that they are the perfect fit for the role.

A special kind of blockage to changes in the composition of the board can occur in organizations that are dominated by one or more of the founding fathers who believe that they are in control and don’t want to risk changing. This can result in “founders’ syndrome” in which nominating committees don’t recognize the need for new talent and a change in the composition of the board.

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