What is a board of directors?
Who serves on a board of directors? What are four essentials to building a strong board of directors? The answers to these questions—and others—are available in our McKinsey Explainers series.
“If the CEO of a company is the lead singer, the board of directors is the rhythm section. The chief executive officer fronts the company, leading the team in day-to-day operations to carry out strategy and create value. But just like the bass player and drummer lay down the lines that form the backbone of a great pop song, it’s the board of directors that provides direction and oversight to ensure shareholder and broader stakeholder interests are well looked after.”
Who serves on a board of directors?
What are four essentials to building a strong board of directors?
“Here are four areas that are essential for building a better board.
- Deepen directors’ commitment.
- Clarify responsibilities and board composition.
- Create trust by investing in board dynamics.
- Broaden the board’s scope.”
H0w has the COVID-19 pandemic changed how boards operate?
How can boards help usher in digital transformation at their organizations?
“Here are five things board directors can do to have the greatest impact on digital transformation:
- Be clear about the implications of technology.
- Ensure that the digital transformation is fundamentally changing how the business creates value.
- Track whether the digital transformation is working.
- Get expansive about talent.
- Understand where nontraditional emerging threats are.”
How can a board shape an organization’s talent and culture?
How can a board help an organization build resilience?
What are some actions directors can take to hone corporate purpose?
“Here are five specific actions boards can take to build, own, assess, reinforce, and drive purpose:
- Build and role model an authentic purpose narrative with management, engaging stakeholders proactively on the company’s strengths, vulnerabilities, and possibilities.
- Own purpose in board practices. That means boards should reflect and role model diversity and ESG competence. Purpose and ESG issues should be regularly included on the board agenda.
- Assess purpose commitments, and ensure management sets clear, measurable goals, actions, and accountability at all levels of the organization.
- Reinforce viewing core board decisions through a purpose lens. Boards can use purpose to pressure test decisions and trade-offs in company strategy, investments, risk and performance management, HR and culture, governance, and external reporting.
- Drive organizational accountability for purpose through board and management evaluations, training, and reporting. Boards can tie ESG metrics to executive compensation and celebrate successes related to purpose.”
Articles referenced:
- “The board’s role in building resilience,” December 8, 2022, Sean Brown, Celia Huber, Ida Kristensen, and Asutosh Padhi
- “Five ways to increase your board’s long-term impact,” July 15, 2022, Celia Huber, Greg Lewis, Frithjof Lund, and Nina Spielmann
- “The role of the board in preparing for extraordinary risk,” March 22, 2022, Nora Aufreiter, Celia Huber, and Ophelia Usher
- “Boards, talent, and culture,” August 30, 2021, Hugo Bague, Frithjof Lund, and Mary Meaney
- “The postpandemic board agenda: Redefining corporate resilience,” August 3, 2021, Celia Huber, Frithjof Lund, and Nina Spielmann
- “How executives can help sustain value creation for the long term,” July 22, 2021, Ariel Babcock, Sarah Keohane Williamson, and Tim Koller
- “How boards can help digital transformations,” June 21, 2021, Celia Huber, Alex Sukharevsky, and Rodney Zemmel
- “The role of boards in fostering resilience,” June 9, 2021, Martin Hirt, Frithjof Lund, and Gordon Orr
- “How boards have risen to the COVID-19 challenge, and what’s next,” April 29, 2021, Celia Huber, Frithjof Lund, and Nina Spielmann
- “The board’s role in embedding corporate purpose: Five actions directors can take today,” November 20, 2020, Celia Huber, Sebastian Leape, Larissa Mark, and Bruce Simpson
- “The pros and cons of activist investors,” May 10, 2019, Sean Brown, Joe Cyriac, and Sandra Oberhollenzer
- “How activist investors are transforming the role of public-company boards,” January 3, 2017, David R. Beatty
- “The CEO guide to boards,” McKinsey Quarterly, September 9, 2016
- “Building a forward-looking board,” McKinsey Quarterly, February 1, 2014, Christian Casal and Christian Caspar
- “Board governance depends on where you sit,” McKinsey Quarterly, February 1, 2013, William George
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