What is a Board of Directors?
The board of directors consists of individuals appointed by the organization or its owners to oversee the organization’s management team and lead the overall direction and strategy of the business.
The structure of the board typically consists of 6-8 members, but it’s common for boards to vary in size based on the needs of the organization and skill sets necessary to execute the company’s strategy. Normally, the board elects one of its members as chairman who has authority laid out in the organization’s bylaws. Directors
are legally obligated, as fiduciaries to act in the best interest of the organization.
Board of Directors Best Practices
The responsibility and authority of a board of directors is prescribed by the laws of the jurisdiction of incorporation and the organization’s self-adopted bylaws. Responsibilities often include:
- Recruiting, retraining, and supervising the management of an organization
- Providing the direction and strategy of the organization
- Creating a governance policy for how the group will reach decisions and enact policies to guide its own actions and the actions of management
- Fiduciary oversight of personnel, finances, and compensation, and the execution of strategy
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