Technology has reached every aspect of our lives, from how we interact in our social environment to how we do business. This article will analyze the roles and responsibilities of board members using board management software.
Board software: new perspectives of the board of directors
Today, companies face unprecedented challenges such as the explosive growth of technology, changing business models, increasing the speed of decision-making, and introducing new management practices. More than ever, business needs directors who can meet new challenges and help balance sustainability and development.
According to the board of directors evaluation, the paradigm of boards of directors and the nature of their work has changed in three dimensions:
- First, the very professional activity of members of the boards of directors has changed, the standards of which have been formed for many years.
- The second vector concerns the competencies of the board of directors. You can bring together different directors with various competencies that are now in demand and necessary, such as understanding the digital transformation process and the ability to manage risks, or you can develop your own existing directors.
- The third vector – is values. Today, an independent director is a person who formalizes his values.
One of the board of directors’ main tasks is to participate in forming the company’s long-term business strategy, considering existing trends and future market dynamics. At the same time, the strategy should not be rigid since it requires regular updating in a constantly changing world. All this leads to companies digitizing basic processes, including the board of directors’ communication. For this purpose, they implement virtual board portal platforms to organize real-time collaboration securely.
Roles and responsibilities of modern boards
So, the typical responsibilities of the board members using board software solutions comprise
- defining approaches to investment;
- drawing up plans and budgets for the company;
- creating mechanisms of internal control in the company;
- evaluating the performance of the company and its executive management bodies;
- developing systems and methods for motivating and stimulating personnel working in a joint-stock company;
- executing decisions of the general meeting of shareholders;
- creating and maintaining the corporate culture.
Today, the traditional role of the board of directors in a public company is to oversee and control. It is prescribed in the requirements for entering the stock exchange and the corporate governance code. But the world has become more complex, and one oversight function is no longer enough. We need two more: an additional source of expertise and a constructive opponent for management. In this regard, the most effective board of directors should include people not only with different competencies but also with different types. Those who like to be mentors will become good advisers, while visionaries who can predict trends will become opponents.
Of course, this requires specific changes in the composition of the council. At the meetings, it will be necessary to discuss not only issues related to the results of activities but also future strategies, motivation of management, and development of culture and talents. On the other hand, the transition of members of the board of directors to new roles will open up an opportunity for conducting an open dialogue with top management that is not burdened by hierarchical restrictions and will allow them to receive complete information about the affairs of the company and the market. It, in turn, will enable them to form a more effective business strategy.