The effective work of the board of directors as the highest management body of the enterprise is the key to the success of any company. Check the most effective pillars of successful virtual Board governance.
How Can a Board of Directors Be Effective Online?
As a project manager, you will face many challenges in your career. Especially when you start an online startup, there will come a time when your business reaches a point where things can start to fall apart. You will come across multiple project timelines that you need to align and complete. There will be resources that you need to manage as well as budgetary needs that need to be met.
Like everyone else, board members have had to quickly adapt to the new conditions created by Covid-19 and innovate in their daily work. The economic shock, unique in its impact, has put vital strategic decisions at stake, depriving board members of the luxury of face-to-face meetings. The Boards had to compromise and become accustomed to virtualization under the pressure of protecting the interests of their organizations from the consequences of the disaster.
The pillars of successful virtual Board governance provide CEO business owners with as much direct access as needed to high-quality expertise in a cost-effective way, including:
- Financial and operational reporting.
- Profitability analysis and improvement plan.
- Cash flow analysis and improvement plan.
- Financial and management analysis.
- Development and monitoring of the budget.
- Tax strategies.
- Presentation and reporting to the board of directors and investors.
- Cost and cash flow management​.
- Venture capital and investor relations.
- Banking and alternative sources of finance.
- Operational support to the chief operating officer.
- Business valuation.
- KPI and dashboard development.
The considered issues constitute the exclusive competence of the board of directors (supervisory board) of the company. The exclusive competence of the board of directors (supervisory board) can be presented in the following forms: absolute, relative, and additional. In addition, the law gives the right to transfer part of these powers to the executive body of the company. The Council has the right, when the interests of the company so require, to convene a general meeting of shareholders. Even in the absence of relevant provisions in the articles of association, the board may decide that the implementation of certain actions by the board requires the prior consent of the board of directors.
Why Do Boards of Directors Need Digital Transformation Too?
The pandemic has pushed companies from all industries to move to new digital solutions. Much has been written about how the transition to remote has affected employees, managers, and directors, but there is another important group that has had to quickly restructure their work: boards of directors. How much has the rapid digitalization caused by the pandemic affected boards of directors? And will these changes persist post-pandemic in the future “new normal”?
In addition to the obvious benefits of reduced travel and increased attendance, moving to a virtual environment has allowed boards to improve corporate governance and communication through shorter agendas, clearer presentations, more engaged discussions, and closer interaction with top management and external experts.
All companies need virtual board governance, but not all companies need it in the same way. There is no single, common corporate governance model for all, although the challenges for companies are the same:
- the need to attract funding;
- the need to maintain and expand market share;
- risk and innovation management.