The board of directors plays an important role in the management of a corporation. The board is comprised of individuals with diverse backgrounds and abilities who are not associated with the company or management team. This means that they operate independent of the day-to-day management activities of the company and offer a fresh perspective on any strategic issues that might arise.
The main function of the corporate board is to determine the vision, mission and objectives of the company. This is often determined in conjunction with the general manager or the CEO of the business. The board will also help the company in achieving its objectives through the creation of strategic policies and a strategy for managing risks. The board can also provide valuable contacts and networks for the company.
The board’s second responsibility is to ensure that the company is operating legally and in line with its stated mission and purpose. This includes making sure that the board has an knowledge of the company’s legal documents for organizing, such as the articles of incorporation, bylaws and applications for tax-exempt status. The board also ensures that the company is in compliance with its legal reporting requirements.
Lastly, the board is responsible for hiring and determining the compensation of the CEO and overseeing the management of the company. The board also oversees the company’s financial statements and assists the chief financial officer to come up with short- and long-term strategies for the company based on a SWOT analysis. Additionally the board is accountable for evaluating and assessing its own performance and provides the necessary leadership training to all members.
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