A board of directors plays an important part in the management of a company. The board is composed of people with a variety of backgrounds and skills who are not connected to the management team or company. This means that they function independently of the day-today management tasks of the business giving a fresh perspective on strategic issues that may arise.
The main function of corporate boards is to define the vision, mission and goals of the organization. It usually works in conjunction with the CEO or general manager of the company. The board can also assist the company to achieve its goals by assisting in the formulation of a strategic plan and plan to manage risks. The board can boards of directors responsibilities also provide valuable contacts and networks to the company.
Another crucial responsibility of the board is to ensure that the business is operating legally and in line with its stated mission and goal. This includes ensuring that the board understands the legal documents of the company, including bylaws and articles of incorporation, and applications for tax exemption status. The board ensures that the company complies with its legal reporting requirements.
The board is also accountable for the selection of the CEO, setting his compensation and directing the management. The board is also accountable for overseeing the financial statements of the company as well as helping the chief financial officers design short-term and long-term company strategies based on SWOT analysis. In addition, the board is responsible for assessing and evaluating its own performance and providing an education in leadership to all members.