Members of the board act as a sole team who steers the company towards a sustainable future by adopting sound, ethical, and legal governance and financial management policies. Board members will help determine the company’s vision and mission, and set the pace for its current operations and future development. Along with reviewing company goals and directing company policies, they will determine the values that should be promoted throughout the company. For medium or family-owned businesses, where the board may not be mandatory but optional, it is also a framework where the CEO, shareholders, C-level executives and external advisors can periodically align and validate the company’s strategy to be executed by the CEO.
It is important to identify qualities in board members such as honesty, integrity, independent decision-making and objectivity. Knowing how a board works is also essential. Having a seat on a board of directors is a commitment that cannot be taken lightly. Besides the soft skills, the board must embrace different knowledge areas such as the business industry and local market, finance, legal and regulation compliance.
Above all, the board must be formed by trusted and experienced executives, selected by the shareholders for a long-term perspective, as strategy is a long-term affair. Usually, the board of directors includes company insider executives such as a chief executive officer, along with a majority of outside, or independent, directors with relevant expertise. Outside directors don’t face the same conflicts of interest as company insiders on a board. At CIB, we perform independent board member roles for our clients, either local Spanish companies or branches reporting to a foreign parent company.
