A board of directors is an advisory committee which assists companies in operating as efficiently as possible. They are independent of company management, and focus on making decisions that affect shareholders and stakeholders. They also protect the business during times of crises. The structure of the board varies depending on the company’s bylaws Board Report and articles of incorporation. It is typically comprised of non-management members elected for a certain period however, some companies choose to have terms that end and begin at different times to ensure that there aren’t too many vacant seats at the same time.

It is important to choose board members with a mix of skills and backgrounds. The most effective boards are diverse and comprise people of various genders, ethnicities, backgrounds and experiences. This helps to bring wider perspectives to the table, which can assist in identifying new opportunities and overcome obstacles.

When forming your board you should look for candidates who have specialized knowledge and can contribute to the growth of your business. For instance, a board member with expertise in capital raising can aid your business in scaling up and capitalize on opportunities in the market, while a person with experience in marketing can provide tips on how to position your brand in the marketplace and increase sales. A board member who has extensive legal or financial knowledge can assist your company in difficult situations. A good board of Directors has numerous responsibilities, among them their role as legal fiduciaries. They also establish the company’s strategic direction and provide oversight to ensure the general managers and the CEO are following the plan.