A board of directors plays an essential role in the management and governance of a business. The board is comprised of people with a variety of backgrounds and talents who are not connected to the management team or the company. They are not a part of the day-to-day management activities of the business and can offer a fresh view of any strategic challenges that may arise.
A corporate board’s primary function is to set the organization’s vision as well as its mission and goals. The majority of the time, this is done in conjunction with the CEO or the general manager of the company. The board can help the company reach its goals through the development of strategies and a risk management plan. In addition, the board will help the company by providing valuable network and business contacts.
Another important obligation of the board is to ensure that the company is operating in compliance with the stated mission and objectives. This includes ensuring that the board is equipped with a strong understanding of the company’s legal documents for organization, such as articles of incorporation, bylaws and applications for tax-exempt status. The board also 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 overseeing the management. The board is also accountable for ensuring the financial statements of the company as well as aiding the chief financial officer to create short-term and long-term business strategies based on SWOT analysis. The board is also accountable for assessing its own performance and providing leadership training for the members of the board.
