The Roles and Responsibilities of a Board of Directors

A board of directors is an elected group of individuals who represent the interests of a business. The board is comprised of the chief executive officer (CEO), top managers and eminent people who are not directly involved in day-today operations. It sets high-level strategy and supervises management. It meets regularly to review performance and monitor the progress. It also approves major corporate transactions, including mergers, purchases as well as stock splits and new product launches. The board also determines compensation policies for the CEO and other executives, and ensures they are aligned with the company’s goals. It also manages risk and oversees the operational and financial performance which includes preparing annual budgets and reports.

A strong board requires a variety of perspectives and a variety of expertise. The best boards are active and proactive, taking on issues which could impact their company, like the importance of culture and strategic focus, succession to leadership and talent management governance and risk, digital transformation and sustainability, and possible mergers and acquisitions. They provide the input and oversight needed to address these issues, while maintaining the vital distinction between their responsibility as a board and management.

To business operations management tips perform their roles and responsibilities, the most efficient board members work closely with the CEO in order to comprehend the company’s strategy and vision and the challenges and risks. They are ready to engage in a thoughtful debate that focuses on strategic plan, oversight and accountability. They make decisions that are in the best interest of the business, while ensuring their independence and avoiding conflicts of interest.