A board of directors, also known as “BoD” or a “board”, is a set of individuals elected by shareholders to represent the interests of the distinction between a company mission statement and a strategic vision is that the company. Board members establish guidelines for the overall oversight of the company and management, as well as protecting the assets of shareholders. The board acts as a liaison between a company and its investors, supervising and ensuring that the company is operating in a legally responsible manner.
This involves setting the tone for the entire company from the top by establishing basic rules of ethical conduct. It approves corporate strategies that aim to create sustainable long-term value, selects an executive director and supervises the CEO and senior management in the operation of the business of the company, which includes the allocation of capital to expand and assessing and managing risks.
The board also examines financial reports and ensures that the operations of the company are in line with the laws and regulations. It also communicates with all stakeholders, like employees suppliers, customers and employees, as well as the local community, in order to understand their concerns.
It is essential that a company’s boards include both outside and inside members, and an equal mix of gender and ethnicity as well as ages. In reality, companies with more diversity on their boards are better financialally than those that don’t. This is because boards with a diversity of members are more likely to have a range of perspectives and opinions that lead to better decisions.