How Corporate Boards Are Navigating the Deluge of Risks and Whirlwind of Forces

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Corporate Boards

The board is accountable to oversee a company’s operations and ensuring that it is operating legally and is in the best interest of its shareholders and other stakeholders. It also functions independently from the management of the company and its day-to-day operations.

In the last 10 years, boards have shed their reputation as a gang composed of powerful insiders who work solely to make money and are hesitant to fire CEOs. Instead, they’ve become advisory teams, which are essentially coaches – who are able to handle a variety of demands, from traditional ones like increasing revenues and establishing solid succession plans to more recent ones like decreasing a company’s CO2 footprint and boosting social equity.

How do the top board members of today navigating the avalanche of risks and the whirlwind force that is shaping our economy’s future? Fortune interviewed board members and analyzed data from numerous companies to answer this question. While we couldn’t find any board that was reflective of a modernized model The most successful boards shared a number of fundamental characteristics.

Diverse board of directors

The COVID-19 pandemic taught boards that it’s more important to have a variety of perspectives and backgrounds in the boardroom, to help plan strategy and deal with crises. Directors have said that the most effective boards are those that have a culture of trust and transparency, and they try to stay current on their knowledge by continuous learning and training.

The most active boards adopt an active approach to their duties and have fewer committees assigned to them which helps maintain the crucial distinction between the role of the board and that of management. They also work to strengthen their financial knowledge and have a better comprehension of the technology they’re using, the latest cybersecurity techniques, and other issues facing businesses today.

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