The board of directors plays a vital role in the administration and governance of a company. The board is comprised of people with a variety of backgrounds and talents that are not a part of the management team or company. They are not a part of the management and daily operations of the company and are able to provide a fresh perspective on any strategic issues that could arise.
The primary function of a corporate board is to determine the goals, vision, and mission of the organization. This is usually done in conjunction with the CEO or the general manager of the company. The board can also help the business achieve its goals by formulating strategies and a risk management strategy. The board can also provide valuable contacts and networks to the company.
Another important obligation of the board is to ensure that the business operates lawfully and in accordance with its stated mission and goals. This includes ensuring the board understands the legal documents of the business, such as bylaws and articles of incorporation as well as applications for tax exemption status. The board also ensures that the company adheres to its legal reporting requirements.
The board is also continue reading this accountable for the selection of the CEO, determining his compensation and directing the management. The board is also accountable for overseeing the financial statements of the company as well as aiding the chief financial officer create short-term and long-term business strategies that are based on SWOT analysis. In addition the board is responsible for evaluating and assessing its own performance, and also provides the necessary leadership training to all members.
