The Importance of Board Composition
The composition of a board is the group of people that a board chooses to govern an organisation. This includes the ratio of women to men, the proportion of minorities and women, and the age of the board members. It also takes into account the proportion of expertise in governance and management issues like fundraising and legal risk.
Diversity is an essential element for a well-balanced board. Many boards are searching for new ways to diversify their membership. Organizations can start by running an audit of their current board members in order to find diversity gaps and prioritize where efforts to recruit should be focused. Diversity is a must across all areas from gender and race to age and education to abilities and experiences.
In addition to considering diversity, a good board needs matrix can help boards know what people they need to have on the board. A typical matrix is an Excel-like grid https://boardmanagementsystem.info/how-to-make-an-informed-choice-with-data-room-comparison that lists characteristics of board directors and the skills required to perform their tasks. Based on this information a committee can come up with an outline of possible candidates and rank them based on how closely they meet the criteria.
A board must balance the interests of shareholders with those of the management team. This usually means that the board is comprised of a mixture of inside and external directors, with the inside directors having experience in managing non-profits or businesses. Boards also have a chairperson who oversees the work of the board and the committees.