The structure of a Board of Directors (BOD) or board of trustees is one of the most important factors determining a company or company’s success. A well-organized board will ensure that all members are aware of their role and how to do it, and it helps to put the company or organization on the path to its desired goals.
The board is responsible for directing the executive board and determining the overall direction of the company. It is also accountable for the selection and removal of the CEO, determining CEO compensation, determining compensation for other executives in the company, and taking crucial strategic decisions.
Directors who are independent or external may be compensated for their participation. They are non-executive board members that do not hold executive positions within the company. They bring different perspectives to the board, and are often subject-area experts within the industry that the company operates in.
A two-tier board includes an executive board comprised of executives from the company, and a supervisory board composed of independent directors. The supervisory board is accountable for making sure that the management’s decisions are conducted in accordance with the company’s policies and laws.
A advisory or consultative board is made up of those who have a stake in the company. This could include investors or customers. Advisors can provide advice to top executives and offer unique perspectives that are not available within a company. They can also assist in finding growth opportunities, and help with the implementation of strategies to achieve the goals of the company.
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