The Role of the Board of Directors
The board of directors consists of individuals who have been chosen or elected by the company's shareholders and stakeholders to oversee and manage the company. The board of directors meets regularly throughout the year, and ensures that the policies and vision of the company are maintained. It is the responsibility of the board to act in good faith for the company with all present and future business deals, mergers or acquisitions.
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Chief Executive Officer
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The chief executive officer of a company is selected and appointed by the board of directors to oversee the daily progress of the company. The board of directors regularly evaluates and reviews the performance of the CEO. The board will evaluate the CEO on her relations with the board as well as on the leadership the CEO has in the company and on any other specifics the board has outlined in the job description for the CEO. It is the board of directors who advise the CEO and makes the decision to dismiss or retain the CEO.
Mission Policy
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The board of directors for companies and businesses puts together the company's mission and vision statements, which are designed to chart the company's course. The board will work with the company's CEO and managers to make sure the goals they have set forth are being attained, and if not, the board will come up with ways for the company to achieve those goals.
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Company Budgets
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The budget that the company's management comes up with for the year must be approved by the board of directors. The board of directors determines whether the budget aids the company and whether all money spent will be used in an effective way. The board will ensure that the budget is reasonable for all expenses, including travel and training for employees, as well as office rental space and equipment. The board of directors has the responsibility of monitoring the budget once it has been approved.
Mergers and Acquisitions
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The board of directors will recommend or discourage any acquisitions or mergers. The board needs to review and evaluate whether the mergers or acquisitions are an unreasonable risk to the company. The board of directors has the duty to discourage any deal that has the potential to weaken the company.
Wrongful Trading
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Some members of a board of directors can be held accountable for illegal trading. The board of directors has to act in the best interest of the company, instead of trying to benefit themselves. If any director of the board acts to benefit himself at the cost of the company, he could be held financially responsible. Whenever there is conflict of interest for the board of directors, the board must always choose in favor of the company, and not themselves.
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