A board of directors is a vital role in the administration and governance of a business. The board is composed of individuals with diverse backgrounds and talents that are not a part of the company or management team. This means that they work independently of the daily management activities of the company and offer a fresh perspective on the strategic issues that may arise.
A corporate board’s primary function is to define the company’s vision objectives, mission, and values. This is often determined in conjunction with the general manager or CEO of the business. The board can help the business reach its goals by establishing strategies and a risk management plan. In addition, the board will offer the company useful networking and business contacts.
Another important responsibility of a board is to ensure that the company operates legally and in accordance with its stated mission and goal. This involves ensuring that the board has an in-depth knowledge of the company’s documents that govern the organization, such as articles of incorporation, bylaws, and applications for tax-exempt status. The board ensures that the company is in compliance with its legal reporting requirements.
The board is also responsible for hiring and setting the compensation of the CEO and overseeing the management of the company. The board also monitors the financial statements of the company and assists the chief financial officer develop short and long-term strategies for the company that are based on a SWOT study. The board is also responsible for evaluating its own performance, and delivering leadership training to all members.