What are the titles and descriptions of board members and what do they do?
A board of directors provides strong governance to organisations, including non-profits. Board members (directors) offer valuable insights into the various aspects of running a business, including strategy, finances, legal issues, digital transformation, ESG and marketing. They are expected to act in the company’s best interests and align the interests of shareholders and managers.
In this Lexicon, we define a board of directors and outline the different roles they play.
What is a board of directors?
An elected board of directors is a group of individuals responsible for the strategic management of a company or organisation, such as for-profit or non-profit organisations, businesses, or government agencies.
The board meets regularly to set policies for management and oversight. It is a legal requirement for public companies to have a board of directors, but many non-profit organisations also have boards of directors.
What are the titles and descriptions of board members?
The number of members on a board depends on several factors, including the country, industry, shareholders, and the organisation’s size. Below are the most common positions that make up a board:
Chair of the board
The chair is the highest-ranking person on the board and often serves as the president of the company in the United States. Since they are responsible for leading large teams of people, this individual must be a strong leader.
In accordance with their country’s Company Law, they conduct board meetings, appoint committees, and perform other duties. Chairs also work in conjunction with CEOs and executive directors to shape an organisation’s culture.
Generally, the vice-chair serves directly under the chair, whom they support in performing their duties and responsibilities. Vice-chairs perform the chair’s duties when the chair is absent, so they must be capable of handling the role of acting chair effectively. Working closely with the board chair and CEO, they assist in executing any directives, setting agendas for board meetings, and conducting formal board assessments. Additionally, they may be asked to resolve conflicts of interest that may arise on the board.
Board secretaries are responsible for several administrative, communication, and legal compliance tasks.
It is the primary responsibility of the board secretary to record, document, and distribute meeting minutes, which serve as a record of the discussion and any votes taken. They are responsible for keeping these records safe and accurate.
Likewise, the board secretary keeps track of the organisation’s activities to ensure all actions conform to Company Law. Their responsibility usually includes notifying all members and stakeholders of regularly scheduled and additional meetings.
Two different types of directors sit on boards: those who are part of the executive management team and independent, non-executive directors.
Directors who are non-executive serve on boards as ‘critical friends’. They act as unbiased advisors who provide objective advice to the board.
Directors who don’t hold one of the previously mentioned positions often volunteer to serve as committee chairs. Meetings are held where motions can be made, and matters of the board are discussed and voted on.
What is the highest position on a board of directors?
The board chair is the highest position on a board of directors. Chairs oversee the work of the board and the organisation’s management team. Chairs work closely with the chief executive to ensure board resolutions are carried out.
Additional responsibilities include:
- Nominating committee chairs and recommending committee members
- Coordinating the annual evaluation of the chief executive
- Recruiting new board members with the help of the nominating committee
- Being an alternate spokesperson for the organisation
- Helping the executive director or chief executive prepare agendas for board meetings
- Assisting in the orientation process for new board members
- Providing board members with feedback on their performance
How many members usually sit on a board?
A typical board of directors has nine members, but some have three, and others have 31. Typically, private companies have between three and seven directors on their boards. To avoid voting ties, boards are usually an odd number.
What are the responsibilities of a board member?
Director duties and responsibilities typically include the following:
- Taking care to act in the best interest of the company
- Being loyal to the organisation and its members in good faith
- Attending board meetings
- Approval of specific company actions, such as agreements, contracts, new company policies, asset purchases and sales, and officer nominations
- Making changes to the bylaws and articles of incorporation
How do you become a board member and company director?
David W Duffy, the CEO of the Corporate Governance Institute, describes what makes an effective company director, he details the the titles and descriptions of board members, and discusses the outline and the objectives of the Diploma in Corporate Governance.