In corporate management, the board of directors is the ultimate team which accepts responsibility for an entire firm. The board is responsible for determining goals, vision, and mission and weighs in on such issues as strategic planning, mergers and acquisitions capital appropriations, operational budgets, and the decision on compensation. The board is also accountable for hiring view and firing the CEO and setting executive pay rates including profit sharing, bonuses and employee stock options. Boards are often organized around committees focusing on specific tasks. For example the audit committee is in contact with a company’s auditors while the compensation committee manages issues like salary rates and stock option grants.
Boards are the heart of an organisation. They make sure that all assignments are completed and that criteria are carefully analyzed prior to being presented to management for approval. Some presidents with a great sense of discipline utilize the board to to enforce quotas, other performance measures and to gauge the performance of their subordinate executives.
Directors rarely get involved in lower-level management policy decisions, but they play a significant role in establishing big policies for the company. They make decisions that have a huge impact on the business for example, closing factories, for instance. They decide on where to put the company’s money, and they establish long-term goals for growth, quality finance, people and quality. The board must also establish guidelines for its own conduct and should address legal issues such as conflicts of interests, director independence as well as community benefit and CEO evaluation.