This article was originally published in The ESOP Report in November 2010 by The ESOP Association.
Effective boards make a significant contribution to their company’s success. However, in many cases, employee owners do not understand why their organization has a board, what the board does, what kinds of decisions the board makes, and, ultimately, how their board adds value. When there are board members who are not employees of the company, employee owners often wonder why it makes sense to let outsiders influence corporate decision-making. In return, board members, especially if they are external to the company, often feel disconnected from employee owners’ experiences in and perspectives about the company as well as not understanding employees’ concerns.
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