A board of directors, also referred to as “BoD” or a “board”, is a group of people elected by shareholders to represent the interests of the company. Board members create policies for overall company oversight and management, in addition to safeguarding shareholder assets. The board acts as a liaison between a company and its investors, overseeing and ensuring that the business operates in a legal and responsible manner.
This involves setting the tone of the entire organization at the top, by establishing the fundamental rules of ethical conduct. It approves a corporate strategy which is designed to create long-term sustainable value, selects and supervises a CEO and the senior management team for running the company’s businesses, including assigning capital and managing risk.
The board also reviews financial reports and makes sure that the operations of the company are in compliance with laws and regulations. It also communicates with all stakeholders, such as employees suppliers, customers and employees, and the local community, to listen to their concerns.
The board of a company should comprise a mix of inside as well as outside members, with a mix of gender, age, and ethnicity. Companies that have a greater diversity of board members usually do http://www.netboardroom.com/what-is-the-difference-between-vision-and-mission-statements better financially. A diverse board is more likely than not to have a variety of perspectives and opinions that can help make better decisions.