The company board member attaining meeting in meeting room

Let’s Delve into the Inner Workings of Board Membership

The nuts and bolts of it all.

The basic structure of a board of directors varies depending on the needs of the organisation and any specialties within a specific industry, such as its regulatory environment. You can have boards as large as 30 members (non-profit boards) or as small as nine members (typical for a Russell 3000 company).

The number of directors on any organisation’s board depends on the needs of the organisation and is mandated within the bylaws. If a board is too small, members are stretched thin. If it’s too large, it can be challenging for the board to operate as a group. This means that every organisation needs to determine what’s optima in order to ensure that the board serves to help – not hinder – performance.

What Are Bylaws?

At the top line level, the bylaws of an organisation outline:

  • How many board members are required
  • The method for electing new members
  • Frequency of board meetings and meeting rules
  • Specific voting rights
  • Officer positions and responsibilities

As boards represent the shareholders and owners of the organisation, it is understood that their role is to act within the best interests of these stakeholders. If you are going to serve on a board, you should consider what size of team you are comfortable working with. Do you prefer a small knit team or a larger board where you have greater exposure? 

To strike a balance between the internal requirements and external expectations, it is usual for a board to have both internal organisation members and external members – the latter being brought in for their skills and/or specific industry expertise. To be able to effectively guide the board on decision-making, a well-managed board will have a board skills matrix in place. 

duties of board members

What Is a Board Skills Matrix?

This matrix lays out the skill requirements that the board believes it should have, and helps in the recruitment process by managing the required skills, characteristics, and capabilities when a board is replacing a member or expanding the organisation’s board structure. In recent years, many boards have been tasked to develop new parameters aimed at developing more diversity and attracting participation from people who represent the wider customer base served by the organisation.

Diversity is bigger than just gender and race. It includes culture, age, education, socio-economic status, and especially mindset. With rich and relevant board dynamics, boards will be better able to meet the needs of their customers, relate to their pain points, and support improved performance. In general, boards benefit from including individuals with a broad mix of leadership skills, backgrounds, experiences, and perspectives. 

Why Do Boards Require Team Effort?

Serving on a board of directors is a team effort. It takes the right attitude, the right level of commitment, and the right mix of personalities. As a collective effort, everyone has a vital role in getting it right. Good board governance includes having clearly defined roles and responsibilities, usually through a job description.

It also involves regularly scheduled reviews of member recruitment and activity to ensure the board is running smoothly and staying focused on tasks, and that every member is living up to their fiduciary duties (i.e. their commitment to act in the organisation’s best interests). Directors who hold particular roles on the board also carry additional responsibilities. There are a number of common board roles, with specific responsibilities associated with each. Examples include:

  • The President or Chairperson is responsible for leading the board and usually works most closely with the CEO of the organisation. 
  • The Vice President of the board is responsible for specific assignments from the board chair and will assume the role of President when he/she isn’t available. 
  • The Secretary prepares and maintains important records, such as meeting minutes and committee reports. 
  • The Treasurer has the responsibility of monitoring finances, and may work with other board members to develop financial plans.

Why Is It Important for Directors to Know Their Fiduciary Duties?

Many at times, when appointed to a directorship of an organisation, people are taken up with their director responsibilities and are often unaware of their fiduciary duty obligations. On a high level, fiduciary duties require board members to stay objective, unselfish, responsible, honest, trustworthy, and efficient. 

Any breach of fiduciary responsibilities could have devastating implications – including both collective and personal liabilities for the board directors. It is very important, therefore, that directors know what their duties are and what is expected of them at all times throughout the decision-making process during their time as board members, as there are possible legal ramifications.

board members duties

A board director who is diligent about their fiduciary duties helps to protect the organisation’s reputation. The word ‘fiduciary’ is all about trust and, under corporate governance law, that is what’s required of directors. Specifically, there are three key duties that every board member must adhere to:

  1. Duty of Care
  2. Duty of Loyalty
  3. Duty of Good Faith 

They may sound pretty simple, but each carries its own legal requirements.

1. Duty of Care

The duty of care refers to the process and manner in which boards make decisions concerning the future of the organisation. This duty focuses on the need to be thorough, with a need to investigate and research any potential impact of decisions made. It seems straightforward, but given that an organisation has a responsibility of continuity – and a duty to take future strategy, goals, and vision into account – it could prove disastrous if the decision made today is short-sighted.

2. Duty of Loyalty

This is the duty to never let any outside interests, personal affiliations, or allegiances interfere with their responsibility as a director. Board members are expected to not engage with personal or professional dealings that put their self-interest or that of another person/business above the interest of the organisation. 

To shed some light on what this could look like, some of the ways this has burned directors in the past include gaining secret profit that belongs to the organisation, competing directly with the organisation, or using their position to deal directly with the organisation as a vendor or partner.

board members responsibilities

3. Duty of Good Faith

The duty of good faith implies that after members have explored all options related to a decision, they must choose the one that they believe best serves the interests of shareholders. According to Cornell Law School: “A violation of the duty of good faith may include an intentional derelict in the usual duties of a director or officer, intentionally acting for a purpose other than the benefit of the corporation or intentionally violating the law.”

These duties sound clear enough, but they are generally based on law, and if a director chose to follow a path that they truly believed was the best option for the business, the law protects them from liability. There are circumstances that make a director liable to the corporation and, sometimes, to its creditors, shareholders, or other people for any losses caused by their inability or failure to exercise due care. A director typically breaches their duty in one of two ways: they may commit overt acts that constitute mismanagement or simply just not to act on important topics, which can also be construed as a failure to direct.

These legal responsibilities are also why a number of people shy away from board service. Yet, if you are acting with good faith and fulfilling your duties, there’s nothing to shy away from. It is also another key reason to stay on top of reviewing the minutes of every board meeting. If you are absent, you want to be aware of what happened in your absence. And if you were there, you want your input and objections officially noted. Serving on a board is a privilege – and with every privilege, comes responsibilities.


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Unlocking Prosperity: Three Fundamental Money Principles for Abundant Living

Wealth Unveiled: Prosperity Principles

Money affects every part of our lives. It can bring joy and security, but it can also bring stress and worry. As women, we tend to have a different relationships with money. One thing is certain though: We all want to live a life of abundance and prosperity. Here are some “Money Principles” are not just theoretical concepts, but practical guidelines that can and should be applied in our daily lives to manage our finances effectively. Let’s create a positive relationship with money.

Understanding the dynamics of money and how it works is the first step towards achieving financial prosperity. Firstly, money, in itself, is not the end goal, but a means to an end. It is a tool that can provide us with the resources we need to live a fulfilling life. However, without the right knowledge and understanding, money mismanaged can be a huge blow to our dreams and sustainability. Therefore, it is crucial to learn and understand these fundamental money principles.

The Importance of Money Principles

Money principles serve as a guide for our financial decisions and actions. It’s about creating a framework for managing our finances effectively and responsibly and help us make informed decisions that align with our financial goals and values.

Its imperative we develop a healthy relationship with money. Instead of viewing money as a source of stress or worry, we can see it as a tool without our emotional involvement. Once we remove anger, fear, lack and other negative feelings from the equation, a shift is created in our energy field. This shift in perspective can have a profound impact on our financial well-being and overall quality of life. It can help us overcome financial challenges, achieve our financial goals, and live a life of abundance and prosperity.

The Three Fundamental Money Principles

Principle 1: Spend Less Than You Earn

This may seem like an obvious principle, but it is one that many people struggle with. As of today, we are an out-and-out consumer-driven society. This is an easy trap for anyone to fall into leading to overspending and living beyond their means. This is how one gets sucked into financial stress and debt, hindering our ability to live a life of abundance. It is therefore crucial to develop the discipline to spend less than we earn and live within our means.

The first step to implementing this principle is to create a budget. This involves tracking your income and expenses and setting limits for your spending. It may require making sacrifices and cutting back on unnecessary expenses, but it is crucial for living within your means and avoiding debt. A budget not only helps us control our spending but also gives us a clear picture of our financial situation, enabling us to make informed financial decisions.

Another important aspect of this principle is to save and invest wisely. By setting aside a portion of your income for savings and investments, you are not only preparing for the future but also creating a safety net for unexpected expenses. This can also help you achieve long-term financial goals, such as buying a house or retiring comfortably. Think about building wealth over time.

Principle 2: Give Generously

What goes out must come in! True prosperity is not just about accumulating wealth, but also about sharing it and using it to improve the lives of others. We are not talking about just giving to charity, but also being generous with our time, talents, and resources. It encourages us to share what we have with others and use our resources to make a positive impact in the world.

Giving generously not only benefits others but also brings blessings and abundance into our own lives. It helps us cultivate a mindset of abundance and gratitude, and reminds us that we have more than enough to share with others. By giving generously, we also contribute to creating a more just and equitable society, which ultimately benefits everyone. Give that tip to your hairdresser, sponsor a kid, help out a local charity in UAE.

Principle 3: Seek Wisdom and Guidance

The final fundamental money principle is to seek wisdom and guidance when it comes to managing our finances. This can involve seeking advice from financial experts in the UAE, reading books and articles on personal finance, or even seeking guidance from religious or spiritual leaders. This principle encourages us to continuously learn and grow in our understanding of money and financial management.

When we learn from the experiences and knowledge of others it also helps us stay accountable and motivated in our financial journey.


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