The Importance of Board Composition

The Importance of Board Composition

In recent years, investors have focused on the importance of board directors. Boards are composed of individuals who bring their individual expertise, knowledge and networks to the table. But the primary goal of every effective board is to work together to monitor performance and help the CEO.

To accomplish this, a board needs to be well-equipped and arranged to achieve its goal. This is usually accomplished by assembling a team that could serve as a sonic board and find out the truth.

In general, it is advised that boards include members who are first-time members as well as experienced directors to ensure an equal amount of perspectives and expertise. To accomplish this, it is important to have an objective framework that will allow the nominating committees and the board to determine the qualities, skills and abilities needed to be a suitable director candidate.

A popular tool is a board matrix which contains individual traits that can help to guide the selection of potential board members. It is crucial to keep in mind that just because one has certain traits, does not mean that they are the ideal candidate for the position.

A particular kind of obstruction to changes in board composition can arise in relatively new companies that are controlled by one or more of the founders who believe they have the best idea and do not want to risk change. This can result in “founders syndrome” where nominating committees do not recognize the need for new talent and a re-evaluation of board composition.

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