The board of directors plays a vital role in the management and governance of a business. The board is composed of people with a variety of backgrounds and talents that are not a part of the management team or company. They are not a part of the day-today management functions of the business and can provide a fresh perspective to any strategic issues that could arise.
The primary role of a corporate board is to establish the organization’s vision as well as its mission and goals. The majority of the time, this is done in conjunction with the CEO or general manager of the company. The board can also assist the company achieve its goals by establishing strategic policies and a risk-management plan. The board also provides valuable contacts and networks for the company.
Another major duty of the board is to ensure that the company operates in a legal manner and in accordance with its stated mission and purpose. This includes ensuring that the board is aware of the legal documents of the company, like articles of incorporation and bylaws and applications for tax exemption status. The board also ensures that the company adheres to its legal reporting requirements.
The board is also accountable for the selection of the CEO, determining his compensation and overseeing management. The board also monitors the company’s financial statements and assists the chief financial officer design short and long-term strategies for the company with a SWOT analysis. The board is also responsible for evaluating its own performance and delivering leadership training to the members of the board.
