The composition of the board is a mixture of people a board selects to oversee an company. This includes the ratio of inside directors and outside directors, the proportion of men, women and minorities, as well as whether the board members are of different generations. It also takes into account the mix of expertise in governance and management issues including fundraising and legal risk.
Diversity is an essential element in a balanced board composition. Many boards are looking for new ways to increase diversity in their membership. It is possible to begin by conducting an audit of their current board members to determine diversity gaps and prioritize the areas where recruitment efforts should be focused. Diversity is a must across all areas including gender and race as well as education and age qualifications and experiences.
A matrix of the needs of the board can assist boards in understanding the type of people they need on their board. A typical matrix is a grid similar to Excel which lists the characteristics of directors on the board as well as the skills they need to fulfill their duties. By using this information an executive committee can develop an outline of possible nominees and rank them according to how well they meet the requirements.
A board must be able to balance interests of shareholders and the management team. This usually means that the board is comprised of a https://boardmanagementsystem.info/board-composition-and-executive-control-of-the-company/ mixture of inside and external directors, with inside directors being experienced in managing businesses or non-profits. Boards also tend to have a chairperson that leads the committees of the board and oversees the work of the board.