The management board is responsible for a range of functions, such as establishing the strategy, managing finances, developing relationships with the community and establishing ethical standards. Boards choose a CEO and monitor their progress. they decide the direction of an organization by establishing goals, vision and strategic thrusts as well as goals; establish community relations as well as establish management guidelines for quality and compliance, as well as governance and make recommendations for organizational changes that occur due to changing circumstances or regulatory pressures.
As fiduciaries Boards are legally accountable to represent shareholders and owners as well as investors. They set the rules for dividends and payouts, as well as hire/fire and compensate upper management and make corporate rules. They also maintain strong communication with management and serve as their representative to the company. The chair of the board, often elected from the board’s membership is a leader of the entire board. They are often non-executive directors (NEDs) who serve as the intermediary between the chief executive officer and the board.
The main role of the board is to be an overseer of the company. Some boards however, cross the line and try to manage the organization on their own instead of ensuring that the actions are consistent with the organization’s mission. Boards need to be able to balance their oversight responsibilities with their responsibility to ensure organization success. This can be accomplished efficiently by utilizing committees. Audit, compensation, and nominating committees, as an example, have become popular methods to look at complicated issues. These committees report their findings to the entire board.