Corporate boards are often filled with people who have extensive experience in business, finance, and other industries. But not everyone is cut out to serve on a board of directors. Here are a few types of people who should avoid serving on Boards:
Those Who Lack Objectivity
If you can't take a step back and look at the big picture, you're not going to be an effective board member. You need to be able to objectively assess a company's performance and make decisions that are in the best interests of the company, not just yourself or your friends on the board.
People Who Are All Talk And No Action
Board meetings can be long and tedious, and it's important that everyone on the board is actively engaged. If you're the type of person who falls asleep during meetings or doesn't bother to read the materials beforehand, you're not going to be an effective board member.
Those Who Are Conflict-Averse
Not all conflict is bad. In fact, healthy debate is essential for making good decisions as a board. But if you're someone who Can't handle conflict or gets emotional during disagreements, you're going to find it difficult to be an effective board member.
People Who Don't Play Well With Others
As a board member, you'll be working closely with other members of the board as well as the CEO and other senior executives. It's important that you're able to work well with others and build constructive relationships.
Those Who Are Greedy
Board members are supposed to be looking out for the best interests of the company, not their own personal gain. If you're motivated purely by money or power, you're not going to make good decisions for the company.
People Who Are Resistant To Change
Times change and companies need to change with them. As a board member, you need to be open to new ideas and willing to embrace change. If you're set in your ways and resistant to change, you're going to have a hard time being an effective board member.
Are you thinking about serving on a board of directors, but not sure if it's right for you? Here are four types of people who may want to think twice before taking on this important role:
1. People Who Are Not Team Players
One of the most important roles of a board member is to work collaboratively with other members to make decisions that are in the best interests of the organization. If you're not a team player, or if you tend to butt heads with others, serving on a board might not be the right fit for you.
2. People Who Don't Believe in the Mission
another key responsibility of board members is to ensure that the organization is true to its mission. If you don't believe in the mission of the organization, or if you have doubts about its effectiveness, you might not be able to fulfill this important obligation.
3. People Who Are Not Willing to Give Time and Money
Serving on a board of directors is a significant commitment of both time and money. Most boards meet monthly or quarterly, and members are expected to participate in committee work and other activities outside of regular meetings. In addition, many boards require members to make financial contributions to the organization.
4. People Who Are Not Well-Informed
effective board members are those who stay well-informed about the issues facing the organization and the sector in which it operates. If you're not someone who likes to stay up-to-date on current affairs, or if you're not willing to do your homework before meeting, serving on a board might not be the right role for you.
FAQs
Generally, it is not a good idea for other staff members to serve on the board of directors. Having staff on the board can create awkward situations. For instance, is an employee is not performing well, the Executive Director may not be able to terminate the individual because they serve on the board.
Who should serve and not serve on a board of directors? ›
Generally, it is not a good idea for other staff members to serve on the board of directors. Having staff on the board can create awkward situations. For instance, is an employee is not performing well, the Executive Director may not be able to terminate the individual because they serve on the board.
Who should you put on your board of directors? ›
You need a personal board of directors.
- Your direct manager or boss.
- Someone with decision making power who is external to your company but in a similar industry.
- A peer in a similar industry.
- A person who has known you for most or all of your adult life.
- A skip level or higher at your current company.
You will be looked on as a governing part of the company – and that comes with great responsibility. Consider that as a board member, you can be sued personally for any decisions the board makes, and your personal assets could be at risk as well.
Who should sit on a board of directors? ›
Board members – executive directors and non-executive directors. Two different types of directors sit on boards: those who are part of the executive management team and those who are independent, non-executive directors. Directors who are non-executive should serve on boards as 'critical friends'.
Who Cannot be on a board? ›
Some individuals may not be suited for serving on a board of directors. For example, those with a conflict of interest with the organization or its stakeholders should not serve on the board. This can include shareholders or employees who may have a personal interest in the board's decisions or actions.
Can husband and wife serve on nonprofit board? ›
Both individuals in each marriage are related (obviously!), but the relationships are considered separately, not collectively. For example, if a board meeting is held with 7 directors, including both couples, you still have an acceptable balance, because there is no relationship connection between the 4 people.
Who is higher than the board of directors? ›
Within the corporate structure, the Chairman and CEO are the two highest-ranking roles within their respective entities. The CEO leads the company, while the Chairman leads the Board of Directors.
What is the minimum number of board members for nonprofit? ›
The IRS generally requires a minimum of three board members for every nonprofit, but does not dictate board term length. What is important to remember is that board service terms aren't intended to be perpetual, and are typically one to five years. Service terms must be outlined in the nonprofit bylaws.
Should a CEO be on the board of directors? ›
While there are pros and cons to both sides of the argument, ultimately it is a decision that must be made on a case-by-case basis. In some cases, it may be advantageous for the CEO to be on the board of directors so that they can provide guidance and strategic direction.
Here are a few traits of problem board members:
- Puts Their Own Interests First. Acting in the best interest of the community is one of the most important guidelines board members should adhere to. ...
- Overuses Their Authority. ...
- Assumes They Know Everything. ...
- Makes Decisions on a Whim. ...
- Fails to Follow Through.
The average compensation for board members in the United States varies widely depending on the organization and the specific role of the board member. According to Salary.com, the median salary for board members in the United States is $74,121, but the compensation ranges between $57,137 and $91,538.
What are the disadvantages of board of directors? ›
Despite these advantages, a few potential drawbacks exist when establishing a board. These may include increased costs associated with director compensation, the need for effective communication and collaboration among board members, and potential conflicts of interest.
Can a husband and wife sit on a board of directors? ›
In most circ*mstances it is ethical, but often unwise. I usually advise against it but I sit on a board myself that has not one but three married couples! My spouse chooses not to join but would be welcome if he changed his mind.
What are the 3 W's you should look for in a prospective board member? ›
But if other people on the BoD cannot observe that you are performing the actions, they don't exist. The three W behaviors are Wealth, Work, and Wisdom.
Who is more powerful CEO or board of directors? ›
In simple terms, the CEO is the top senior executive over management, while the board chairperson is the head of the board of directors. The CEO is the company's top decision-maker and oversees the daily operations and logistics. All of the senior management executives report to the CEO.
Should I serve on a board of directors? ›
If you want to make a difference for a cause you're passionate about or think your abilities can help a company you love succeed, you may be considering joining the board. Being a board member can enhance your career, but it can also come with a lot of personal and professional fulfillment.
Who does the board of directors serve? ›
A board of directors is responsible for overseeing and advising a company so that it functions as effectively as possible. The board ensures that an organization operates lawfully and in the interests of the company's shareholders and other stakeholders (such as its employees).
Is it good to serve on a board of directors? ›
This provides you with real time knowledge you can use in your own career. Expanded relationships. Other highly successful people will be serving on the board with you and their network is available as well.
Should family members serve on the same board? ›
While family members serving on a board of directors is not necessarily a bad thing, it can create potential conflict of interest issues. For example, a family member may be more interested in protecting the interests of the family than the company.
