In a publicly traded company, the board of the company is the group of people who decide what the company does and the reasons for it. The members are elected by the shareholders (the owners) to represent them and to look out for their interests. The board employs the executive who run the day-to day operations according to the direction of the board.
The main role of the board is to ensure that the assets of investors and shareholders are not at risk. It determines the guidelines for dividends and approves or rejects hiring or firing top managers, makes changes to corporate regulations, and conducts an annual shareholders’ meeting.
Typically, the board is composed of inside directors who are officers of the company. There are also outside directors who don’t hold executive posts. The chairman of the Board preside over meetings, sets agendas and delegates tasks to the members. There are boards that have standing committees, such as the audit and compensation committees. These committees typically have a particular scope and are mandated by legislation or listings on stock exchanges.
Boards must be able to balance the need to examine the details of their reports on a regular you could try these out basis, while also balancing their responsibility to focus on the bigger overall picture and not focusing on day-to-day management. It is also essential that boards understand the specific duties it must and wishes to perform itself as well as those it should delegate to top management. Boards often develop the list of reserved powers to clearly define what functions are the sole obligation of the board and those that can be delegated to senior management.