Creating a good board


One of the most critical aspects in any company or business ventureis the selection of board members who are responsible for steeringthe company in its growth and achievement of its goals. Selection ofeffective board members is a contemporary issue that numerous companyfounders and business owners are grappling with (Ward, 2011). It isessential to note that the board of directors plays critical roles inany business and or company. The board is responsible for thestrategic planning of the company, setting compensation and orreviews, setting performance, monitoring company health and alsosetting major objectives for the company. It is therefore abundantlyclear that the members who selected to join the board must havespecific skills which will complement the skills that the founder hasin order to push the dream of the company forward (Bain &amp Barker,2010).

There are various issues that surround the selection of the boardmembers. To start with, it is clear that the board is responsible forsetting the compensation for the CEO who is also the chairman of theBoard. It is evident that this creates a conflict of interest sincethe CEO cannot set his compensation and review his performance (Bain&amp Barker, 2010). Whereas the decisions made by the board use themajority rule, it is worth noting that the chairman must append hissignature to any document agreed upon by the board. This is an issuethat most of the boards face and it has been argued severally thatthe chairman of the board should be an outside member who has nocompensation interests in the company.

Another contemporary issue that faces the establishment of the boardof directors is the issue of diversity. It is clear that numerouscompanies across the world are trying their best to ensure that theirboards of directors, as well as the employees are a reflection ofvarious races and nationalities from across the world (Ward, 2011).This has made some of the CEOs to select board members who areincompetent or lack specific skills in order to ensure that theboards appear representative. This is the same case when it comes tothe issue of gender representation. Many companies and businessesacross the world seek to ensure that their boards have at least athird of their members being women (Feld &amp Ramsinghani, 2014).This has made most of the boards to have incompetent members who donot share the vision of the board. There are some CEOs who willselect women to the board based on their gender rather than theirexpertise. It is also worth stating that boards have become extremelylarge. This is because diversity has forced the CEOs to add boardmembers to try and balance membership on the basis of gender, race ornationality. This has greatly increased the cost to the business aswell as delayed the decision making process.

Majority of the board members are outside members who own no sharesin the company. This has been a contemporary issue to creating aneffective board of directors. It has been argued that the boardmembers show little or no objectivity in company matters since theydo not own any shares (Feld &amp Ramsinghani, 2014). Recommendationshave been made to have members owning shares in the company to makesure that they are objective towards the activities of the companyand that they share in the dreams of the company.


Feld, B., &amp Ramsinghani, M. (2014).&nbspStartup boards:Getting the most out of your board of directors.Hoboken, N.J: John Wiley &amp Sons.

Ward, J. L. (2011).&nbspCreating effective boards for privateenterprises: Meeting the challenges of continuity andcompetition. San Francisco: Jossey-Bass Publishers.

Bain, N., &amp Barker, R. M. (2010).&nbspThe effective board:Building individual and board success. London: Kogan Page.