What Is It Like To Be On The Board of Directors For A Company?

The term “board of directors” is often used without a clear definition. The board of directors for a company can look different depending on the industry. Although there are many distinctions between various companies, there are some components in a board of directors that remain the same.

By Timothy Mably

A board of directors within a company may seem like a mysterious division of higher-ups. The term refers to a group composed of people who are elected by shareholders to oversee the operations of a company. As it meets throughout the year, members partner to manage the company’s public image and make significant business decisions relating to finances, compensation, and senior positions.

Board member of Enterprise Bank & Trust, Alana Muller, says she enjoys being a member of a board of directors. Muller says, “As with any work group, the best boards come together in the spirit of teamwork and with a true sense of camaraderie.” She attests that a board of directors’ primary responsibility is to support executive leadership, provide strategic guidance for a company, and address other challenges presented by leadership.

She says, “It is crucial that board members be active and engaged— not just in anticipation of formal board meetings, but between meetings, in committee work, and as ambassadors for the organization out in the community.” To achieve this, Muller says it’s important to stay on top of activities within a company, remaining aware of media and analyst coverage. It’s similarly crucial to be mindful of financial statements ahead of meetings. This process allows for board members to be prepared to raise thoughtful questions.

“Though serving on a board is once removed from daily operations, the board can play an important role in ensuring the long-term viability of the organization,” says Muller. This dynamic is two-fold as the board should be promoting the company in the marketplace, and ensure that the company vision is consistently pursued.

NFP board committee chair and officer, Jessica E. McClain, voices her gratitude for her being a part of various boards with several not-for-profits and a state agency. McClain says, “Being part of a board of directors has been a very fruitful and fulfilling experience. In addition, I have met and worked with intelligent and diverse individuals committed to great causes.”

Board of Directors Structure and Positions

Board structures vary depending on the type of organization among other factors. Advisory boards, non-profit boards, private company boards, and public boards each have their own distinctions.

Muller says, “Whatever type you are contending with, high performing boards typically include a mix of both executive (professionals who work for the company) and non-executive directors (people from outside the company).” She believes that having diversity in terms of background, experience, industry knowledge, and community involvement among other components is important for a team to consider multiple perspectives. 

Regardless of the type of board, most incorporate a chief executive officer, chairperson, secretary, treasurer, and committee chairs. In not-for-profit boards, officer positions tend to include a president, vice president, treasurer, and secretary. Standing or operating committees involve executive, finance, governance or nominations, and fundraising or development. Some can include their own separate committees.

Boards are typically composed of 8 to 14 members but can fluctuate depending on the company and overarching vision. Usually, board members aren’t paid for their roles as they are already employed by the company. 

How to Become a Board Member

The path to becoming a board member isn’t as clear as other positions within a company. Publicly listed companies have members who are elected by shareholders. Candidates receive nominations by a committee or investors based on various policies put in place by the company.

Professionals who aspire to become members of a board should be mindful of working for a company that includes a board of directors. As you advance positions and become a qualifiable contender, network and express interest in the opportunity to serve on a board. 

McClain says, “Most board seats are filled based on whom current board members know. Another way to identify board opportunities is by looking at local not-for-profits, industry organizations, and state and local government agencies and commissions.” By considering smaller organizations with a board of directors, you can gain experience and credibility to be considered for a larger company.

Muller says, “Additionally, there are the very real considerations of geography (where do you live vs. where is the company located), expertise (what topics do you know about — executive leadership, strategy, finance, human resources, IT, etc.) and experience set (what roles have you served in – CEO, CFO, CIO, etc.) that will likely be taken into account.” Each of these can play an important and practical part in your qualification to be on a board.

As boards primarily strategize and make major decisions as a team, it’s important to build your capacity to collaborate and work within a group. Muller advocates for establishing your own personal “board of directors” to walk alongside you as you navigate your career. She says, “Perhaps when you have a big decision to make, are starting a new venture, need to work through a challenge, it can help to get a group together around a table (virtual or physical) to think it through. Have your personal board of directors at the ready— in your mind, if not in reality.”

Although there isn’t one designated route to becoming a board member, there are many ways you can prepare yourself. By growing as a leader and a team player, you can sharpen your skills as a professional and be ready when the opportunity arises to join a board of directors.

Top Takeaways

What is it like to be on a board of directors within a company?

• A board of directors is a group composed of people who are elected by shareholders to oversee the operations of a company. 
• As they meet throughout the year, they partner together to manage public image and make major business decisions relating to finances, pay, and senior positions.
• It’s important for board members to stay on top of activities within a company, remaining aware of media and analyst coverage, so they can raise issues during meetings.
• Regardless of the type of board, most incorporate a chief executive officer, chairperson, secretary, treasurer, and committee chairs. In not-for-profit boards, officer positions tend to include a president, vice president, treasurer, and secretary.
• They support executive leadership, provide strategic guidance for a company, and address other challenges presented by leadership.