Most people who have not been on a board of directors don’t have a very good idea of what a successful board actually accomplishes.
This is partially because executive boards have many roles that people assume belong to a company’s own management. There are also different types of boards in multiple different industries. Non-profit boards typically administer funds received by donors and vote on issues. Boards of for-profit organizations, such as Google or Amazon, may be more focused on business expansion, and boards of venture capital groups primarily review and discuss the progress of their various investments.
Responsibilities of the Board of Directors
In any organization, the board of directors has a fiduciary responsibility, which involves both financial and legal duties. They are accountable to a variety of groups and individuals, including a company’s employees, creditors, debtors, shareholders, and even the government.
The board is responsible for a significant amount of administrative work. This includes budget planning and determining organizational structure, and discussing the company’s financial performance. The board must also determine a marketing approach that is robust and relevant in an increasingly online world. Additionally, the board is in charge of technological initiatives, including patenting and trademarking for the company.
Boards don’t always accomplish all of these objectives. If members are not fully aware of their individual responsibilities or if there are disputes over issues that will affect some members more than others, such as the value of company’s stocks among shareholders, board management can come to a halt. It’s important that the board protects itself from chaos by organizing meetings effectively, tracking responsibilities , and understanding its board governance limitations.
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