Essential Responsibilities of Boards of Directors

A board of directors plays an important role in the management of a company. The board is comprised of individuals with diverse backgrounds and expertise that are not a part of the management team or the company. They are unaffected by the management and daily operations of the company and are able to offer a fresh perspective to any strategic issues that might arise.

The primary role of corporate boards is to establish the vision, mission and objectives of the company. It usually works in conjunction with the CEO or general manager of the company. The board can help board bookit the business reach its goals by developing strategies and a risk management strategy. Additionally, the board can offer the company useful networking and business contacts.

Another important obligation of the board is to ensure that the company operates in a legal manner and in accordance with its stated mission and goals. This includes ensuring the board is aware of the legal documents of the company, like articles of incorporation and bylaws as well as applications for tax exemption status. The board also ensures that the company is in compliance with its legal reporting requirements.

The board is also accountable for the selection of the CEO, setting the compensation of the CEO and overseeing his management. The board is also responsible for overseeing the financial statements of the company as well as aiding the chief financial officer create long-term and short-term company strategies that are based on SWOT analysis. Additionally the board is accountable for evaluating and assessing its own performance, and also provides the necessary leadership training to all members.