Perhaps this is the natural conclusion from the several insights previously explored. While the CEO and management offers the vision, strategies and tactics as well as the proposed budget, it is the board that controls with its votes the execution of strategy, the expenditure of cash, the taking on of debt or new equity, the very direction of the company as well as its ultimate health.
The most important person in a corporation usually is and should be the CEO. This person, often the founder in early stage companies and beyond, is the originator and keeper of the vision, leading all others below and the board above as willing believers in the vision advanced. But the board is responsible for providing resources to fulfill that vision, which may include new cash infusion or assumption of new debt.
In extreme situations, it is the board that must step up and replace the CEO, assuming the responsibility for finding and integrating a new leader quickly and efficiently. Sometimes this means having a board member step in for a short time as CEO for continuity.
Recently, one of the CEOs in a roundtable who had been active and vibrant for years in both his company and the roundtable, died suddenly of a heart attack. His board met in emergency session and managed a smooth transition to a new leader within a month, during the most traumatic of times for all employees and the board itself. For non-profit boards, the two most important duties under the duty of loyalty and care are the oversight and eventual replacement of the CEO, and maintenance of the entity over its infinitely long lifetime. I have been member and even chair of presidential search committees, and can attest that board members (and other designated stakeholders) spend hundreds of hours in the recruiting process, all without pay.
It is because the continuity provided by the board is the one thing shareholders must count on above all else to protect investment, that the board rises in importance to at least equal stature as the executive cohort.
Very good articles on Company Board of Director insights, issues, responsibilities, etc.
Having been on the Board of several early stage technology ventures, I can confirm the importance of the points you are making. And as those of us with extensive BOD experience are aware, there are many additional aspects to having an effective Board that adds value to the business.
In conjunction with this, as with a great CEO, having great BOD members is typically crucial to improving the probability of venture success and prudently managing risk.
Given the importance of this matter and the scarcity of these people, do you have any suggestions about where to find those that want to make a difference and are sophisticated in business ?
-Ron Thompson
Ron,
There are a number of associations with registered, trained board members as affiliates. I belong to the Forum for Corporate Directors which (unfortunately) serves only Southern California; but there are other organizations to use as resources. Better yet, good corporate attorneys usually have excellent recommendations since they often sit in board meetings and observe the actions of board members in various environments. Good luck!