A board of directors plays an important role in the management of a company. The board is comprised of individuals with diverse backgrounds and skills that are not a part of the management team of the company or its members. This means that they work independent of the day-to-day management tasks of the business, providing a fresh perspective on the strategic issues that could arise.
The primary job of a corporate board is to set the organization’s vision and mission as well as the goals. This is usually done in conjunction with the CEO or general manager of the company. The board can also assist the company achieve its goals through the development of a strategic plan and plan for managing risks. The board also provides valuable contacts and networks to the company.
Another essential duty of a board is to ensure the company is legally governed and operates in accordance with the stated mission and goals. This includes ensuring that the board is aware of the legal documents of the business, such as articles of incorporation and bylaws as well as applications for tax exemption status. The board also ensures that the company adheres to its legal reporting requirements.
Lastly, the board is responsible for hiring and determining compensation for the CEO, as well as overseeing the company’s management. The board is also accountable for ensuring the financial statements of the company and helping the chief financial officers create short-term and long-term business strategies that are based on SWOT analysis. In addition the board is accountable for assessing and evaluating its own performance, and also provides leadership training for all members.
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