A board director is someone who oversees the governance of a company or non-profit. They are legal representatives of owners (shareholders/stockholders) and are legally responsible for high-level decisions. They also set the policies determine whether to pay dividends, and decide the amount of compensation top management receives.
A good board member should be competent in their area of expertise and be able to learn quickly about new industries. But, more importantly they must be able to grasp and apply abstract concepts like strategy and innovation. They need to be able to challenge the status quo, ask hard questions, and help to build trust among the team. In the past, boards focused primarily on management oversight however, they are now more involved in discussions regarding strategic initiatives, such as risk management and resilience sustainability, technology, and digitization mergers and acquisitions as well as culture and talent.
Ideally, a well-rounded and diverse board of directors should consist of composed of both inside as well as outside directors. Inside directors are employees or substantial shareholders of the company and are an essential source of insight and knowledge. Outside directors have valuable experiences and relationships to the company.
A well-functioning board is comprised of people who are united around the core values and goals and care about each other. This results in a more productive boardroom, and makes sure that meetings remain constructive.
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