When it comes to setting strategies, overseeing management and finances, fostering relationships with communities, or establishing ethical standards and values, the responsibilities of the management board are numerous and varied. Boards choose a CEO and monitor their progress. they set the direction of an organization by formulating a vision, mission, strategic thrusts and goals; build community relations and establish management practices to ensure quality, governance and compliance; and make recommendations for organizational changes that occur because of changing circumstances or regulatory pressures.
As fiduciaries boards are legally responsible for representing owners/shareholders as well as investors. They set the corporate rules, set policies for dividends, payouts, and compensation, and also hire and fire the top management. They also maintain a close relationship with management and represent the organization. The chair of the Board, which is typically elected by the board members, is the leader of the entire board. Often, they are non-executive directors (NED) and act as the liaison to the chief executive officer.
The biggest function of the board is to function as a steward for the organization. Some boards however, cross the line and attempt to run the company themselves, rather than ensuring that the activities are in line with the mission of the organization. Boards must focus on balancing their oversight functions and their responsibility for ensuring successful organization. This can be achieved most efficiently by utilizing committees. For example audit, compensation, and nominations committees have become well-known methods of analyzing complex issues. The committees are able to present their findings to the entire board.
