In a publicly-traded corporation, the board is the group that decides what the business does. The shareholders (owners) elect the members to represent and protect their interests. The board appoints the executives who oversee day-to day operations according to the board’s instructions.
The main purpose of the board is to ensure that the assets of shareholders and investors aren’t in danger. It establishes policies for dividends and payouts, appoints or denies the hiring and dismissal of managers at the highest level and changes corporate rules and organizes the annual shareholders’ conference.
Generally, the board is comprised of inside directors who also serve as officers of the company and outside directors who don’t hold executive post. The chairman of the Board is in charge over meetings, sets agendas and delegates tasks to the members. There are boards that have standing committees such as the audit and compensation committees. These committees are usually required by law, or listed on the stock exchange.
Boards need to keep a healthy balance between the need to examine data in depth regularly and their https://www.artboardroom.com/is-your-board-efficien obligation to not only on day-today activities but also on the big picture. It is also important that boards understand the specific tasks it is required and desires to carry out itself as well as those it should delegate to top management. It is typical for boards to develop a schedule of reserved power that clearly defines what activities are solely the responsibility of the board and which it is able to delegate to the senior management.
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