Corporate Governance
- Why do corporations need a board of directors?
While corporations are conducting businesses, they can make costly errors. Failing to have a board of directors is an error by itself as the board can help prevent a corporation from making those mistakes (Evan, 2014). Company founders, Chief Executive Officers, and entrepreneurs tend to be one-sided in their pursuit of establishing a business, which is evident because they had the diligence to take it upon themselves to strike out on their own and achieve their goal. A trusted board of directors helps business founders, CEOs, and entrepreneurs to make goal-based decisions for the business and preventing future damaging consequences.
- What is the value of adding “outside directors” to your board?
External board members bring the much-needed viewpoint and experience to the corporation. They keep an eye on the inside executives and the method the company is managed, and offer advice on risk control and ethical practices in corporate governance (UpCounsel, 2020). External directors are also useful in dealing with conflicts within or between a company and its shareholders. Often members of outside boards may help settle disputes between family owners and serve as impartial mediators. Board representatives of these companies will also help drive company revenue from their connections, or help raise capital. It usually requires an independent board member with the expertise to help identify and enforce tools, leadership, teamwork, Identity, and direction.
References
Evans, M. (2014, August 26). Outside board members bring needed experience and perspective to your company. Retrieved from https://www.forbes.com/sites/allbusiness/2014/08/26/outside-board-members-bring-needed-experience-and-perspective-to-your-company/#7452e7662919
UpCounsel. (2020). Why do corporations need a board of directors? Retrieved from https://www.upcounsel.com/why-do-corporations-need-a-board-of-directors