The job of the board is to provide direction and oversee the executive management team. It makes sure that company policies are followed and that all fiduciary obligations are met. Some boards grant too much power to the executive leadership. The majority of boards don’t. The media is full of stories of business disasters that were caused by corrupt or incompetent management teams.
One of the best ways to avoid such disasters is to ensure that your board members have a broad range of skills and perspectives and functions well as a group. This requires establishing rules of management for the board like embracing diverse perspectives and taking on leadership positions, fostering an agile structure (e.g. the formation of committees for new risk areas) and involving in continuous evaluation of the board and individual members.
Another important principle of management for boards is to avoid getting involved in operational issues, particularly when dealing with the day-to-day activities of your business. The primary function of a board is to define the long-term vision for your company and its position in the world.
Although this might seem like a straightforward idea, many companies are struggling with this idea. For instance, some board members start having direct meetings with management without consulting the CEO or take a leap of faith in the hope of being helpful. This can put the chief executive in a difficult position. The ideal situation is for the CEO to collaborate with the chair of the board and other directors to work out a solution to this issue and build trust again.