A board of directors plays an essential role in the management and governance of a company. The board is composed of people with different backgrounds and expertise that are not part of the company or management team. They are unaffected by the day-today management functions of the business and can provide a fresh perspective to any strategic issues that could arise.
The primary purpose of corporate boards is to define the goals, vision, and mission of the company. This is usually decided by a meeting with the general manager or the CEO of the business. The board can also assist the business achieve its goals through the development of strategic policies and a risk management plan. The board can also provide invaluable contacts and networks to the company.
The board’s second responsibility is to ensure that the business is legally governed and operates in accordance with the declared mission and objectives. This is done by ensuring that the board has an understanding of the legal documents for organization, such as articles of incorporation, bylaws and applications for tax-exempt status. The board also ensures the company follows http://www.boardroomnow.info/virtual-data-rooms-software-for-operational-moments/ its legal reporting requirements.
The board is also accountable for the selection of the CEO, determining his compensation and overseeing the management. The board is also responsible 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. In addition, the board is responsible for assessing and evaluating its own performance and providing leadership training for all members.