The role of a board is to provide direction and oversight to the executive management team, and to ensure that company policies are adhered to and that all fiduciary responsibilities are fulfilled. While some boards delegate too much power to their executive management but the majority of boards do not take their responsibilities to the fullest extent. Unfortunately, the media is flooded with tales of business disasters that are caused by corrupt or incompetent management teams.

To avoid the occurrence of such catastrophes, it is important to ensure your board has an array of perspectives and abilities. It must also function effectively as a team. This is why you should establish certain principles of management for your board which include taking into consideration diversity when forming your board and taking on leadership roles, fostering an agile structure (e.g., forming committees to address the new risks) and ensuring ongoing review of the board itself and individual members.

Another important principle of management for boards is to stay clear of getting too involved in operational issues, particularly when dealing with the day-to-day activities of your business. This is because a large portion of the role of a company’s board is to establish boardmaps the long-term vision of your company and how it is integrated to the larger society.

While this may sound like a no-brainer, a lot of companies are struggling with this idea. For example certain board members begin having meetings directly with management without the CEO’s knowledge or jump to conclusions in an effort to be helpful. This can put the CEO in a precarious position. The CEO must work with the board chairman and other directors in order to resolve the issue and restore trust.