A board of directors, also referred to as “BoD” or a “board” is a set of individuals chosen by shareholders to represent the interests www.netboardroom.com/responsibilities-of-boards-of-directors/ of that company. Board members establish guidelines for the overall oversight of the company and management, as well as safeguarding shareholder assets. The board functions as an intermediary between the company and its investors, overseeing and ensuring that the company is operating in a legal and responsible way.
This includes establishing the foundational rules for ethical conduct and setting the tone at the top for the entire company. It approves corporate strategy which is designed to create lasting value over time, and selects and supervises a CEO and the senior management team for running the company’s business, including allocating capital and addressing risks.
The board also reviews the financial reports and ensures compliance with regulations and laws. It also communicates with all stakeholders, like employees suppliers, customers and employees, and with the local community in order to understand their concerns.
It is important for a board of directors to include both outside and inside members, as well as an equal mix of gender and ethnicity as well as age. Actually, companies with more diversity on their boards are able to perform better financially than those with no. A diverse board is more likely not to offer a variety of viewpoints and opinions that could lead to better decisions.