Board composition has garnered a lot of attention in recent years as investors focus on the importance of the role board directors play in the business. The board is comprised of members who each bring their own expertise, knowledge and networks to the table. But the primary goal of every effective board is to work as a unit to monitor the performance of the company and assist the CEO.
To accomplish this it is essential that a board be organized to be efficient and well-equipped to fulfill its function. Often, this is achieved through the creation of a solid team that can uncover the truth, and act as a sounding board that is critical.
It is generally suggested that boards have members who are first-time members as experienced directors to ensure an equal amount of knowledge and perspectives. To achieve this, it is important to have a clear framework that will allow the nominating committees and the board to determine the skills, qualities and talents required to be a suitable director candidate.
A popular tool is a board-matrix that includes individual characteristics that help to guide the selection of board candidates. However it is important to keep in mind that just because someone is a keeper of certain characteristics does not indicate that they are the best fit for the role.
A specific kind of obstacle to changes in the composition of boards can occur in companies that are controlled by one or more founders who believe they are in control and don’t want to risk a change. This can lead to «founders syndrome» in which nominating committees do not recognize the need for new talent and a change in the composition of the board.