A board of directors, also known as “BoD” or a “board” is a set of individuals elected by shareholders to represent the interests of the company. Board members create policies for the overall oversight and management of a company, as well as safeguarding the assets of shareholders. The board is a liaison between a company and its investors, ensuring and ensuring that the business is operating in a legally responsible manner.
This includes setting the tone for the entire organization at the top by establishing the essential rules of ethics. It approves corporate policies that aim to create long-term sustainability, chooses a chief executive officer and oversees the CEO and upper management in running the company’s business, including the allocation of capital for growth as well as assessing and managing risks.
The board also reviews the financial reports and ensures that they are in compliance with laws and regulations. It also communicates with all stakeholders, including employees suppliers, customers and employees, and the http://www.netboardroom.com/what-is-the-difference-between-vision-and-mission-statements local community, to be aware of their concerns.
It is crucial for a company’s board of directors to include both outside and inside members, who are an equal mix of gender and ethnicity as well as age. In fact, companies that have more diversity on their boards are better financially than those with no. A diverse board is more likely not to offer a variety of perspectives and opinions that could lead to better decisions.