The "very private club" of the board of directors...Really?

The board of directors, the cornerstone of the company, is very often perceived as mysterious and intrigues those who aren’t involved in this world.
The board of directors, the cornerstone of the company, is very often perceived as mysterious and intrigues those who aren’t involved in this world.

While everyone agrees on the need for a board, there are different views on the role it plays in the life of the company.

For company employees, the board is perceived as a closed and very selective club of highly placed people with a great deal of experience in the various areas of company management. Their experience means that they have been involved in the most varied situations that a company may face over time.

The saying: 'the orders come from above' illustrates this perception perfectly.

But what does the board consist of? And what do its members contribute to the company?


Being a member of the board of directors is above all a personal commitment. Except in the case of an investment fund, which is represented by a representative, board members make a personal commitment to the board. There is therefore a notion of responsibility for the role they accept.

The board member will support the management of the company with his or her expertise and experience in one or more areas needed by the company. They support the company in the strategic aspect and in the long-term vision. This support can be linked to a temporary phase in which the company finds itself (growth period, crisis, etc.), but can also be part of the core business (tech, finance, etc.) or specific regulations and legislation (ESG, decarbonization, etc.).

Board of Directors meetings conduct


The board of directors is punctuated by board meetings. During these meetings, the CEO and CFO, who represent the company's executive side, report on the company's situation. Figures play a very important role. They allow the pulse of the company to be shared with the board. Major projects and plans are discussed. Based on this presentation, which is often a huge amount of highly condensed information, the board members must be able to define the necessary actions to be taken to maintain the company's strategy and vision.

The session is a collective exchange during which the various participants will enrich the debate with their own expertise. Some of the resulting decisions will have to be voted on to be validated.

It is then up to the CEO to apply the decisions taken and the advice obtained in the executive, i.e. in the different operational layers of the company.

The importance of the link between strategy and execution


It is often difficult for the workers in a company, who are involved in the day-to-day operational tasks, to follow the strategic vision decided at the highest levels.

Therefore, it is crucial that the CEO is a strong link between the strategic committee and the executive committee. He is the one that must bridge the theory and its application by pleading the common interest of the decisions that must be implemented.

Diversity at the board level


As time goes by and mentalities evolve, this very closed and selective club is gradually changing. Of course, it will always be made up of people who can provide useful advice to the company, but the somewhat dusty image is tending to evolve. There are more and more women, appreciated for their crisis management skills, their creativity, or their diplomacy in communication. Diversity of talents, whether generational or cultural, contributes positively to the opening of this small world of boards.


The Mystique and Evolution of the Board of Directors: A Deeper Dive


A company's board of directors often inspires a sense of intrigue for those not involved in its operations. Its reputation as a closed group of seasoned professionals with diverse areas of expertise leads many to view it as an inaccessible fortress. While everyone acknowledges the necessity of a board, its role in the company's lifecycle sparks different perspectives.

From an employee's standpoint, the board often seems like an exclusive club filled with individuals bearing extensive experience across company management domains. With a wealth of experience across a spectrum of corporate situations, these individuals often appear as the highest authorities. The phrase 'orders come from above' perfectly encapsulates this perspective.

But what exactly does a board entail, and what value does it bring to the company?

The Commitment of Board Membership


At its core, becoming a board member signifies a personal commitment. Except for instances involving an investment fund, which deploys a representative, board members personally commit to their role, taking on a significant degree of responsibility.

They leverage their expertise in one or several areas to aid the company's management. The board members offer strategic guidance and a long-term vision. This assistance may pertain to specific company phases (like growth or crisis periods) or concern the core business (like tech, finance, etc.), specific regulations, and legislation (such as ESG, decarbonization, and more).

Conduct Board Meetings

The rhythm of a board of directors is set by its meetings. Here, the CEO and CFO – representing the company's executive facet – provide updates on the company's state of affairs. Data plays a critical role in these discussions, providing a snapshot of the company's health and aiding the understanding of necessary actions to uphold the company's strategy and vision.

Board meetings encourage collective discourse, with participants contributing their individual expertise to the discussion. The decisions arising from these meetings often require a vote for validation. The CEO is then tasked with executing these decisions and recommendations within the company's operational layers.

Bridging Strategy and Execution

For company employees engrossed in daily tasks, keeping pace with the strategic vision defined at the highest echelons can be challenging. Therefore, the CEO's role as the link between the strategic and executive committees is crucial. They are the bridge between theory and application, advocating for the shared benefits of the decisions needing implementation.

Diversity at the Board Level

The board's stereotypical image of a closed and selective group is evolving as mindsets progress. While board members are selected based on their potential to provide valuable insights, the monolithic perception is fading. Today, boards are becoming increasingly diverse, including more women, recognized for their crisis management abilities, creative thinking, and diplomatic communication skills. This diversity, whether generational or cultural, is contributing to a broader, more inclusive vision within boardrooms.

As we journey through time and observe the changes in the boardroom, it's evident that the modern board of directors is shedding its enigmatic veil. The emphasis is shifting towards openness, diversity, and shared responsibility. While the board remains a cornerstone of a company's success, its evolution is a testament to a more inclusive, dynamic, and strategic future.

The Vital Role of Board Management Software

In light of the evolving roles and complexities of board operations, the importance of efficient board management tools becomes paramount. Board management software, such as Govrn, provides a platform that simplifies board operations while increasing productivity and efficiency. From scheduling meetings, sharing documents, tracking tasks, to facilitating private and secure communications, such tools are instrumental in modern board governance.

In addition, platforms like Govrn are furthering the inclusion and accessibility narrative within the boardrooms. They enable remote participation, thus democratizing the decision-making process by accommodating board members regardless of their geographical location. This ability to virtually collaborate empowers boards to tap into a diverse pool of talent, fostering inclusive decision-making and contributing to better governance.

Conclusion

The evolution of the board of directors, from an exclusive, somewhat mystical entity to a dynamic, diverse, and inclusive team, marks a significant shift in corporate governance. These changes aren't merely cosmetic; they're fundamentally altering how decisions are made, how strategy is defined, and how the company navigates its future.

As we see an increase in diversity in the boardroom, enhanced by the use of advanced board management tools, the benefits become increasingly apparent: a broader range of perspectives, more robust decision-making processes, improved resilience in the face of crisis, and an enhanced ability to drive innovation and growth.

The journey of the boardroom from its traditionally secretive, exclusive domain to a more open, accessible, and inclusive environment is ongoing. As we move forward, embracing these changes isn't just beneficial - it's essential for sustainable success in an increasingly complex and diverse business landscape.


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