In corporate management the board of directors is the ultimate team which accepts responsibility for the whole company. The board determines goals, vision, and mission and weighs in on such issues as strategic planning, mergers and acquisitions capital appropriations, operating budgets, and the decision on compensation. The board is also responsible for appointing and dismissing the CEO and setting executive pay rates, profit sharing, bonuses and employee stock options. The majority of boards are arranged around committees http://www.netboardroom.com/what-is-the-difference-between-vision-and-mission-statements that are focused on specific tasks. The audit committee, for instance is in contact with the company’s auditors. The compensation committee is accountable for issues like salaries and stock options.
Boards are the heart of an organization. They ensure that all work is completed and that the criteria are carefully considered prior to being presented to management for approval. Some presidents with a strong sense of discipline use the board as a way to enforce quotas, other performance measures and to assess the performance of their subordinate executives.
Directors aren’t involved in the managerial decisions that are at the lower levels, but they play a major role in setting up big policies for a business. They make key decisions for the company, such as closing facilities. They decide where to invest the company’s funds and establish long-term goals for growth, quality as well as finances and people. The board must also establish guidelines for its conduct and address legal issues such as conflicts, director independence, community benefits, and CEO evaluation.