A Board of Directors is elected to represent the shareholders of a company and, thus, is expected to lead by example. The importance of having ethical directors cannot be overstated. The most forward-thinking companies consistently practice sound governance and understand its legal responsibilities.
Directors should at all times act faithfully, and with diligence and care with regards to the best interests of the company. It is important for directors to know the laws and acceptable business practices for the industry in which they practice. A Board is expected to establish policies and make important decisions on behalf of the company. Directors should attend meetings, oversee changes, and really get to know how the business functions. They should be familiar with the company’s Bylaws and should update them periodically when necessary.
Successful directors work well with other members and employees of the organization. One of the most important aspects of effective leadership is picking people that you can trust to also act ethically and perform their duties in the best interests of the company. That trust goes both ways,, however, and employees should feel comfortable that Board members will take their complaints seriously without fear of punishment for reporting improper conduct.
As some of the leaders of a company, the actions of the Board of Directors will be heavily scrutinized. A business cannot be successful without honest, dependable management. That is why if you are lucky enough to be trusted with such responsibility, it is important to act ethically and take your fiduciary duties seriously.