The board of directors in corporate management is the final team that takes on the responsibility for the company. The board decides on vision, mission and goals and weighs in on issues as strategic planning, mergers and acquisitions as well as capital appropriations, operating budgets and compensation decisions. The board is accountable for the hiring and firing of the CEO, as well as setting executive pay www.netboardroom.com/responsibilities-of-boards-of-directors/ rates, bonus payments, profit sharing, and employee stock options. Boards are often organized around committees focusing on specific functions. For example, the audit committee works with the company’s auditors. Meanwhile, the compensation committee manages issues such as the rate of pay and stock option grants.
The job of a board is to serve as the corporate conscience, ensuring that homework is completed and that criteria are carefully thought through before being proposed for approval by management. Some presidents with a strong sense for discipline use the board as a way to enforce quotas, other performance measures, and also to gauge the performance of their subordinate executives.
Directors are not involved in the managerial decisions that are at the lower levels, but they play an important role in establishing the major policies for a business. They make crucial decisions for the company, including closing facilities. They decide how to invest the funds of the company and set long-term goals in terms of quality growth, finance and personnel. The board should also establish guidelines regarding its conduct and also address legal issues like conflicts directors’ independence, conflicts of interest community benefits, as well as the evaluation of the CEO.