The role of the board of directors in corporate management

These 5 data room fearures are what we found to be the most relevant for quick reference

The constant growth of the volume of information necessary for making managerial decisions leads to the fact that it is necessary to process and store documents in larger quantities than before. Traditional methods are ineffective; therefore, companies introduce data rooms for online business cooperation.

Virtual data room in modern business

Information resource management is of particular importance for the activities of any company. In the modern world, institutions are faced with the need to process an enormous amount of information. Regardless of the legal status or organizational forms of activity, businesses are called upon to actively interact with executive and legislative authorities and structures involved in regulating the economy. All this, in turn, generates a specific workflow. Thus, companies are acutely aware of the need to organize effective management of information resources and are taking active steps to use computer technology in document management.

According to the data room pricing policy, it is the most available and reliable leading software in the IT market for arranging productive and secure business collaboration.

The top 5 data room features

There are the most important 5 data room software features relevant for quick reference:

Document storage

After the work on the document is completed, the question of its storage arises. The data room is an ideal repository for documents of any format. The database size is limited only by free space on the server or computer. The system can store text files, audio, video, presentations, archives, and images. Documents are stored by categories: incoming, outgoing, and internal. Operational storage helps to get rid of bulky archives and folders and save space in the office.

Quick search

One of the main advantages of electronic document management is an easy and fast database search. In the data room, you can easily find any document by details and content. Employees do not have to spend several hours or even days searching for the right letter or contract. Saving a lot of time searching for documents is already a weighty argument for implementing a data room.

Task control

The data room includes the functionality of control executive discipline. Mechanisms for setting tasks and instructions are an effective tool for the interaction of employees within the company, and reports on performance discipline allow managers to assess the quality of work and workload of employees quickly. In the software, you can set tasks for employees and track their completion by deadlines. After the employee completes the task, he can send the text to his colleagues for further work, and the direct author of the task will receive a notification of successful completion.

Processing of incoming documentation

Company employees have to deal with a huge mass of external and internal correspondence daily. It often leads to not all papers reaching the addressee; some are lost along the way and remain unanswered. The integration of board software with corporate mail allows you to save all correspondence and quickly access it from any computer. The system can keep records of all incoming documents from organizations and individuals. Incoming documents can be grouped into lists, for example, by sender or type.

Confidentiality

In the data room solution, you can set the level of access for individual employees or departments to documents. For each document, a card is automatically generated, which indicates: the level of confidentiality, date of modification, author, format, number of sheets, and a brief description. You can open the card and find all the necessary information about the last edit, set up access, and digitally sign. It is guaranteed to protect important corporate data.

What Is the Difference Between Vision and Mission Statements?

The starting point of strategic planning is the identification and formulation of the organization’s goals. In this case, a general goal is usually distinguished, which is defined as a mission, and specific goals of a lower level. So, what is the difference between these concepts? Here is more about it.

Formation of a strategic vision, and mission of enterprises

Strategic management is a complex management process that consists in defining a strategic vision and mission, conducting analytical research, and identifying industry and enterprise development trends to justify a future strategy and a set of measures for its implementation.

The development of an organization’s strategy begins with the formation of a vision and the choice of a direction for development. The main thing that can be achieved by long-term strategic planning is a clear vision of the future, in which some managerial problems may seem insignificant and momentary, as well as other problems that are not visible in the daily “churn”.

What is a vision?

Vision is essential for effective leadership and responsible decision-making. A modern manager cannot act effectively as a leader or a manager who determines a strategy without a firm understanding of the essence and prospects for the development of his business, an understanding of what to strive for, how the situation in the industry will change in the future and how this change will affect the position of the enterprise after 5–10 years.

Thus, the strategic vision is the concentrated opinion of the management regarding the priority areas of development, areas of activity, and customer needs, as well as the possible competitive positions of the enterprise in the long term. If the management does not calculate the options for future situations, the organization misses the existing market opportunities and loses its competitive advantages. Companies that do not have a strategic vision do not know what market position they should strive to win for themselves. Therefore, a clearly articulated vision is a prerequisite for sustainable strategic leadership in an organization.

The formation of a strategic vision includes 3 components: mission, long-term course, clear statement of the strategic vision.

What is a mission?

The mission explains the essence of the activity, the specifics of the business, and the way the company develops – everything that distinguishes this company from others in this industry. The mission statement contains a description of three elements:

The needs of the buyer, that is, what must be satisfied.
Groups of buyers, that is, who will be the object of service.
Actions, technology, and knowledge, i.e. how the company creates and distributes customer value and satisfies the needs of its customers; the owners of the organization; employees of the organization; consumers; partners; societies

The mission indicates the meaning of the creation of the organization, its purpose, and its role in the general trends in the development of man, society, civilization, and mankind. It should find specific features of the organization that distinguish it from similar organizations operating in the same market segment or performing similar functions. It is clear that it is the mission that becomes not only a way to identify the corporation since it emphasizes its uniqueness, but also the main strategic integrator of the organization’s employees. Besides, the mission contributes to the formation of a common vision of goals by the employees of the organization.

Often the mission and vision are formulated at the same time. The difference between them is not always obvious. We can say that the mission and vision together reflect the collective ambitions of the organization.

Responsibilities of Boards of Directors

The role of the board of directors and its place in the corporate governance system are defined at the level of legislation and are also disclosed in the Corporate Governance Code. In this article, more about it.

Board of directors as a key element of corporate structure

Changes in the external environment and new challenges that modern organizations face, whether it is the increasing use of various innovations and technologies or changing regulatory requirements, require increased attention at a strategic level to emerging risks and, as a result, an increased role and responsibility of members of the organization’s board of directors.

The effectiveness of the board of directors of an organization largely depends on the understanding by the owners of the organization of the purpose of this governing body, understanding why the organization needs a board of directors, what is its actual role in organizing the corporate governance system and the company’s activities as a whole. Understanding by members of the board of directors that it performs the key functions of control and strategic management for the long-term sustainable development of the organization, and is not a body created to formally comply with the requirements of the law, which only approves decisions prepared by the company’s management, is a key aspect of the effective work of the board of directors.

All companies need corporate 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 necessity to attract funding;
the need to maintain and expand market share;
risk and innovation management;
creation of a sustainable system that allows the company not to depend entirely on the personality of its founder.

Board of director’s responsibilities

The board of directors helps organizations grow and develop at the pace that the business needs – without slowing down and at full capacity. Plus, the board of directors and corporate governance also solves the owner’s tasks – it helps him to minimize his presence in operational management.

Both advisory boards and boards of directors have a similar structure:

both should have a chairman who presides over council meetings, as well as formalized procedures for conducting them;
executive directors – as they have an advantage in assessing the understanding of what is happening due to their experience and knowledge of the internal kitchen;
independent directors – they are more likely to be objective and not emotionally attached to the company, unlike executive directors or business owners.

Very often the board of directors is required to make effective decisions, taking into account all available information. Thousands of shareholders in public companies may have very different ideas about what is the best way to run a company. To satisfy their interests, it is necessary to conduct a laborious analysis of possible measures and their results. The board of directors is designed to provide important benefits through competence and effective decision-making.

The board of directors as an active participant in attracting investments to the company

The board of directors is an entity entrusted with a function related to attracting investments to the company. Investors build relationships with companies based on trust, preferring those managed by strong boards of directors. Thus, the board of directors acts in the economic interests of shareholders as a whole, even if there are shareholders who are trying to increase the wealth of shareholders at the expense of other stakeholders. When a company is run by a board of directors, not only advantages are obvious, but also disadvantages.

Importance of Board Job Descriptions

The job description prescribes the rights and obligations of the board management: its powers, area of responsibility, conditions for bonuses, and penalties. These documents help the head of the company manage subordinates and control their work.

What is a job description?

The legislation does not require the creation of such documents. They are created taking into account the characteristics and tasks of a particular company and may be called “job descriptions”, “job responsibilities” or “job regulations”.

The purpose of the job description is to describe what the employee should do and how he should interact with superiors and colleagues. Thanks to the document, the employee understands what specific work he needs to perform, and it is easier for the manager to hold the negligent employee accountable.

Also, the job description protects the interests of the employee and the employer. For example, you cannot assign an employee a job that is not listed there. Ideally, several persons should be involved in the creation of the instruction: an employee composes it, the head coordinates it, the personnel department checks compliance with the labor code, and lawyers check other laws.

The document can be issued as accepted by the company. It does not matter who coordinated it and whether there are seals on it. Its content must suit the employee and the employer. The job description should contain the following points:

requirements for professional training: qualification, education, experience;
a detailed list of duties and work activities;
to whom he obeys and whose orders he carries out;
dress code;
who performs the work of an employee while he is on vacation or sick leave;
requirements for employee knowledge;
interaction with other employees, what he may require from them;
what he is responsible for: for attracting new customers, for meeting delivery dates, for sales, for writing articles;
registered company name;
full name and position of the employee who approves and signs the document;
full name and position of the employee for whom the instruction is intended;
the date signed and signed by both parties.

The purpose of the board job description

Board professional standards often reflect the level of professionalism of the organization as a whole. A well-organized and well-functioning board tends to lead an organization with a similar reputation. Thus, the board job description takes a place here to regulate the responsibilities and rights of the body. Board job descriptions are an element of the company’s management system. The founder or director himself should supervise the work on the preparation of job descriptions in a small company.

Even though the list of powers and job responsibilities of the board of the organization is much more extensive, the same instructions are drawn up for this position as for any employee. Great strength means great responsibility, so the director has this document, perhaps, several times longer than that of other employees.

The main sections of the job description of the board include:

A list of documents and legal acts that regulate his activities.
List of knowledge, skills, and abilities that are needed for work.
Information about the need for advanced training, indicating specific time frames.
Powers that make it possible to regulate processes within the institution and represent the interests of the organization in the external environment.
Types of responsibility for non-compliance with job descriptions and dishonest attitude to their duties. In addition, the activities of the manager are also regulated by the norms of the current legislation.