Understanding: The Board’s Role

The first step in getting a better handle on the HR leader’s role with the board is to understand the board’s role with the company. There are many ways to think about the board’s role, and the following are the most crucial, in my view.

1. Representing shareholder interests 
2. Providing governance and oversight 
3. Making selection, performance, and compensation decisions about the CEO and other key senior leaders 
4. Reviewing, shaping, and endorsing the strategy 
5. Offering wisdom and advice 
6. Balancing between input and consensus 
 

1. Shareholder Interests The first and most fundamental responsibility of the board is to represent the interests of shareholders, those individuals, and institutions that invest capital in the company and expect a financial return. In this capacity, board members are expected to play an objective, impartial role in ensuring that company management makes wise, profitable, and risk-appropriate decisions that benefit shareholders.

2. Governance and Oversight As an important supplement to protecting shareholder interests, boards are also expected to provide strong governance for and oversight of how the company is run. This role involves ensuring there are rational goal-settings, financial, audits, risk management, legal compliance, environmental sustainability, ethics and integrity, and other similar processes and safeguards in place...

Credits: Excerpt from the Book ‘THREE: The Human Resources Emerging Executive’. Published by John Wiley & Sons, Inc.