A board of Directors plays an essential role in the governance and management of a company. It is comprised of individuals with a range of skills and experiences who are not part of the management team or the company’s team. This means that they operate independent of the day-to-day management tasks of the business offering a fresh view on the strategic issues that may arise.
The primary purpose of a corporate board is to determine the company’s vision as well as its mission and goals. It usually works in collaboration with the CEO or general manager of the company. The board can also assist the business reach its goals through the development of strategies and a risk-management plan. The board also provides valuable contacts and networks for the company.
Another essential role of the board is to ensure that the business operates in a legal manner and in accordance with the stated mission and objectives. This involves ensuring that the board is equipped with an knowledge of the company’s legal organizing documents, including articles of incorporation, bylaws and applications for tax-exempt status. The board also ensures that the company adheres to its legal reporting requirements.
The board is also responsible for hiring and setting compensation for the CEO, as well as overseeing the company’s management. The board is also responsible for overseeing the financial statements of the company and helping the chief financial officers create long-term and short-term company strategies based on SWOT analysis. The board is also accountable for evaluating its own performance, and also providing leadership education to all of its members.
