A board of directors (also known as a “board” or “BoD”) is an association of people who are elected by a company’s shareholders to represent their interests. Board members establish guidelines for the overall oversight of the company and management, while also protecting shareholder assets. The board acts as a liaison between the shareholders of the company as well as the company, ensuring that it operates in a legally-sound and responsible manner.
This includes establishing the foundational rules for ethical conduct and setting the tone at the top for the entire organization. It approves the corporate strategy that is intended http://www.netboardroom.com to build long-term sustainability and value, and chooses and supervises a CEO as well as high-level management to manage the company’s operations, which includes the allocation of capital and managing risks.
The board also reviews financial reports and makes sure that the company’s operations comply with all applicable laws and regulations. Additionally it communicates with all the various stakeholders, including employees customers, suppliers and the local community as well as others, to comprehend their concerns and aims to create a positive impact on these communities.
A company’s board should have a mix of inside and outside members that are a mix of gender, age and ethnicity. Companies with a greater diversity of board members tend to do better financially. This is because a diverse board is more likely to have a variety of opinions and perspectives, leading to better decisions.