In a publicly traded corporation the board is the body that decides what the business does. The shareholders (owners) choose its members to represent and safeguard their interests. The board employs executives who manage day-to-day operations in accordance with the rules of the board.
The main purpose of the board is to ensure that the assets of shareholders and investors are not in danger. It frames guidelines for dividends and payouts, approves or disapproves the hiring or firing of high-level managers and changes corporate rules and holds the annual shareholders’ meeting.
Typically, the board is composed of inside directors who operate as officers of the company, and outside directors who do not hold executive positions. The chairman is the one who presides over meetings, sets agendas and delegates tasks to the board members. Some boards also have standing committees such as the audit and compensation committees. These committees are usually required by law or are listed on the stock exchange.
Boards need to find a way to balance the need to review details frequently and their obligation to concentrate not only on day-today https://www.artboardroom.com/is-your-board-efficien activities but also on the larger picture. It is essential for boards to know the specific responsibilities it must and wants to fulfill itself, and which it should delegate. Boards often create the list of reserved powers to clearly define what activities are the sole responsibility of the board, and those that may be delegated to the senior management.
