The Board of Directors in Corporate Management

Published in 17 de outubro de 2023 by

The board of directors in corporate management is the ultimate group that has the ultimate responsibility for a company. The board is responsible for determining vision, mission and goals and weighs in on matters as strategic planning, mergers and acquisitions capital appropriations, operating budgets, and the decisions regarding compensation. The board is accountable for the hiring and dismissal of the CEO and also for determining executive pay rates, bonus payments, profit sharing, and employee stock options. Boards are typically organized around committees which focus on specific duties. For example the audit committee is in contact with the company’s auditors. While the compensation committee oversees issues like salary rates and stock option grants.

The role of a board is essentially to act as the corporate conscience, making sure that homework is done and that the criteria are thought through before being proposed to management for approval. Some presidents who have a strong sense for discipline use the board as a means for imposing quotas, other performance measures, and to gauge the performance of their subordinate executives.

Directors generally do not get involved in lower-level management policy decisions, but they play a significant role in the formulation of big policies for the company. They make crucial decisions for the company, such as closing facilities. They decide on how to invest the funds of the company and set long-term goals in terms of quality growth, financial stability and employees. The board should also set guidelines for its own behavior and address legal issues such as conflicts of interests directors’ independence, conflicts of interest the community benefit, and CEO evaluation.